The Credit Controller’s Best Friend
22nd December 2017.
Particularly at this time of year, any late payment can strain the cash flows of businesses across the country.
And this is when your role, as the credit controller, becomes vital.
Credit controllers do more than collect payment, they offer advice and strategy on how best to improve credit, rid a business of debt, and build on customer relationships.
Whether you are a business owner doing the job in-house, or a full-time employee, it is vital that you have the right skills and techniques in place to do the job effectively.
Being a credit controller can be a lonely role though, and late paying and troublesome customers can be difficult to track down.
Your company may even be putting pressure on you to improve cash flow and settle the matter quickly.
Let the Credit Protection Association be your ally, let us be your best friend. We are here to give you the tools you need and support you with those difficult payers.
Agree your terms up front
When beginning a new piece of work with a customer, it’s always best to set expectations first.
You and the customer should both have a clear understanding of what work is needed, for how long, and at what cost. If they want to pay early or pay up front, it’s always best to decide on the terms immediately before any misunderstanding follows.
The team at CPA can offer help and advice on setting credit terms in your contract so you get the right start.
Know your customer
With all modern credit controllers, it is vital to know to whom you are extending credit.
Here at CPA, we encourage all our clients to use credit application forms. If you want to safeguard the cash flow of the business, you must make sure all the customer’s details are filled out.
Collecting all this information early will make your job far easier in the long run. You can also use this information to get one of our credit reports up front and check their credit score and recommended credit limits.
While communications are open, you should make sure they know everything there is to know about you.
Set out your terms and conditions early, including the interest for late payments, the deadline for payment etc. Again, this should address any proposed issues early before payment difficulties arise.
Send out an invoice immediately
It might sound obvious, but it’s imperative that an invoice is sent out as soon as the order has been fulfilled. As some businesses will not pay until they receive an invoice, any delays with the invoice could lead to delays in payment.
Make sure it’s clear who it’s addressed to, and that all the information is accurate and crystal clear. Any confusion or inaccuracy will risk further delays if the customer decides to dispute it.
An invoice should, therefore, include a detailed description of the goods or services supplied and at what cost, as well as details on how and where to pay.
Here at CPA we have a very successful email recovery system. We acknowledge that traditional mail can be unreliable, and have faced our fair share of “I never received it” excuses.
We, therefore, encourage all credit controllers to email the invoice as well as send it through traditional mail, which will make you look more efficient and should help prevent further issues. We also suggest a further courtesy call to check it has been received, again highlighting your attention to detail and giving them a platform to address any payment issues early.
Maintain a positive relationship
Just like any relationship in life, it never hurts to be friendly.
This is just the case with your customer.
Maintaining a friendly and positive relationship can carry certain advantages. Not only will it encourage them to keep using your services, but it could inspire them to pay on time.
If they like you, they might try a little harder to avoid damaging the relationship.
Try to keep contact open, and give them a courtesy call to check invoices have been received, as well as a friendly reminder before payments are due.
Here at CPA, we enjoy building a rapport with our customers by phone or email, allowing them to feel comfortable enough with us to communicate any payment issues before invoices become overdue.
We also stress the importance of thanking those customers who do pay on time! Good customers can be hard to come by, so we always make an effort to thank them when we can.
Bring in tracing agents
Not sure of your customer identity? Is your information on them outdated or incorrect?
This is where a trace team is essential.
Here at CPA we have retained tracing agents who will track down those slippery customers who have fallen through the cracks.
Our dedicated and well-trained tracing agents will use credit reference agencies and shared customer databases to locate customers and encourage them to repay our Members!
They will write the emails, make the phone calls, and act as your own credit management detectives!
While some companies do this in-house, hiring external experts can bring in new talent and expertise that quicken the process and make everything that little bit easier!
Make it easy to get paid
Your credit control procedure can easily be made more efficient by expanding the payment methods you offer your customers.
While paying by cheque is traditionally the most popular form of payment, it is also unreliable.
Just as paper invoices can get lost in the mail or misplaced, so can cheques.
Here at CPA, we encourage more modern tactics. Methods such as direct debits and the increased use of company credit cards make the payment process easy. Meanwhile, standing orders can be set up for customers who have a monthly need for your services.
The easier it is for your customers to pay, the fewer excuses they’ll have not to.
If the customer is still not paying, we strongly encourage bringing in an external credit controller like us at The Credit Protection Association!
Bring in the experts
Keeping credit control within your own company is not always successful, and hiring outside help can be beneficial.
As debts grow older, the more difficult they become to collect. There will inevitably come a point when you’ve tried all you can to recover the debt but to no avail.
Debt collection or debt recovery companies will make all the phone calls, write all the emails, and use all the time; that your company simply can no longer afford.
Here at The Credit Protection Association, we help our Members recover debt that their business has failed to retrieve. By hiring our services it allows our Members to redirect their focus onto their business, while we concentrate on their cash flow.
Sometimes just the CPA name and brand is enough to encourage a customer to pay, and doing so without damaging our Member’s relationship with them at all.
So if you need any advice or help from our team, please get in touch. We have years of experience we are just too happy to share!
Litigation services
In the event that the customer is still not paying, they may need to be taken to court.
Fortunately, only a small minority of our Members require the services of our litigation staff to receive payment.
However, for the few whose letters, emails and phone calls are ignored, our litigation team is called into action.
They will obtain County Court Judgements and get our Members paid that way, or enforcement officers will even be instructed.
This should always be seen as a last resort, as it will certainly damage the relationship between your client and the customer.
Nevertheless, it is vital for any company who encounter bad debts, and late payers, that a litigation team is on hand.
Good payers still exist, but it’s good to be prepared for the bad ones.
Thank your customer once they’ve paid
Regardless of when they paid, here at CPA we believe it is good practice to thank them once they’ve settled the invoice.
If they are late payers, this could help repair the relationship with the customer, and if they are good payers, it’s just something extra to sweeten the deal.
Just a quick chat on the phone, or even a nicely worded letter, can go the extra mile and show off the good name of your company!
………………
Credit control offers vital support to UK businesses, guiding them through late payment, bad credit ratings and bad customers.
While it may be viewed as easier and cheaper to keep credit control in-house, hiring external experts like CPA achieves results that would not have been possible from within your own four walls.
While we strongly recommend getting in touch with our debt recovery team for advice, we respect if you want to keep it in the company. Whatever the size of your credit control team, it is vital you make time for it so it doesn’t fall through the cracks.
The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!
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Read our blog -Credit Management that works!
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