8 Bad Habits Every Credit Controller Should Give Up

27th February 2018.

 

Here at the Credit Protection Association, we’ve given you the credit controller’s best friend, and now we’re giving you the opposite; its nemesis, the devil on its shoulder, the practices that all credit controllers should give up.

We all make mistakes, we’re all human after all, but a mistake involving your credit control procedure can affect the cash flow of a business much more vulnerable than your own.

As a credit controller, it’s important to take a hard look at your strengths and your weaknesses. Knowing what you are doing wrong will help you adapt your processes and also help you help your customers better.

So whether you’re a control controller within your own company or an external authority, these are the practices you should avoid.

Supplying late payers.

Rather a big one.

Particularly in the wake of Carillion’s collapse, holding on to late, or bad payers, will not do your business any good.

While we understand that severing ties with a customer is hard, if their presence is going to do your business damage, it’s best to kick them to the curb.

Just like a child, they’ll never learn or be forced to clean up their act if you continue to reward them for bad behaviour.

Some credit controllers use ‘stop lists’ which will pause services until invoices are paid. This can give the necessary jolt that the customer needs to realise that you are not going to wait around forever.

Here at the Credit Protection Association, we provide our members with credit checking tools and credit reports to be used on customers. They are a good way to keep an eye on those you do business with, good and bad, and will alert you to any signs of bad behaviour.

Any fall in their credit score or revenue will be spotted early, allowing you to demand payment before they create excuses.

Making it up as you go along

Particularly when you are working within a small credit control team, it is tempting to ‘hope for the best’ in regards to your workplace strategy.

As a credit controller, you should always be informed and knowledgeable about every aspect of your job. Whether it’s how much the debtor owes, what payment terms have been agreed, or which sector they work in; it should all be well researched and filed accurately.

However tempting it is, never rely on the customer for knowledge about the case, as this will also create an opportunity for dishonesty.

After all, if you were given the chance to knock off a couple of hundred pounds off your total, wouldn’t you?

Using manual processes

While there is a certain amount of reluctance within older industries, not embracing the digital age can put you (and your customer) at a clear disadvantage.

While visiting every customer face-to-face may seem like a good idea initially, once you’ve looked at the mileage, as well as the exhausted faces of your employees, you may have to change your tune.

Sending emails rather than letters, introducing direct debit payments instead of checks, and embracing a new digital filing system, will all increase productivity and the enthusiasm of your employees.

Particularly within the credit management and debt collection industries, many customers feel a certain amount of embarrassment when discussing their finances. Introducing online chat on your website as well as automated payments will help your customers pay their bills quickly, without fear of intimidation.

Unorganised

As a credit controller, and as a businessperson, you should adhere to a clear organised system, whether it’s the way your paperwork is filed or knowing which drawer keeps your pens and paperclips.

One of the major factors is productivity. If you’re unorganised, you will be working slower and your cases will take longer to reach completion. Soon enough, your customers will start to take notice and your sales, and your profits could diminish.

Time will be wasted on finding cases and customer’s phone numbers, fishing through old emails, and getting lost in case files that should have spent time in the shredder. As a result, customers will get impatient and your professionalism will be put at risk.

Not knowing your way around your own desk can also add to your stress, and make the job that much harder.

Sticking to a clear system, such as alphabetising your debtors, or bringing your most recent cases to the top of the pile, will make those Mondays go a lot smoother.

Dismissing Old Debt

As approached in our previous blog, CPA does not discriminate based on age! Whether the debt is a month old or 3 years old, the way you handle the debtor shouldn’t change.

Of course, the older the debt the harder the case may be, but that shouldn’t lead to complacency or disinterest. If a customer has been struggling with the debt for years you should be all the more encouraged to see it recovered.

This should be the case for the cash balance as well. Whether the total is 3 pounds or 3000 pounds, the member deserves the full attention of the credit controller and their full dedication to a positive outcome.

Intimidation by large companies

Particularly when dealing with small business owners, large businesses will use their size and position to get what they want.

Aside from the standard schoolyard quarrels, larger companies have more capital, more contacts and more opportunities than most. For this reason, there is the presumption that they own the playground, which is not only unfair but untrue.

Small businesses are the lifeblood of the economy, and as a credit controller, it is your responsibility to defend them.

As illustrated by the recent Carillion scandal, many large businesses use intimidation as a late payment tactic. Payment terms are extended and overdue accounts are forgiven as a result, leaving small businesses struggling to stay afloat.

Supply-chain bullying has long been a problem for SMEs and it’s time to put the business first and demand your customers do the same.

Falling asleep at your desk

It’s been a hard day and the nights are harder. All your concern for your customers has built up into insomnia. It’s ok if you just lay your head down isn’t it? You just want a little rest, just a little rest here on your desk…

Short answer? No.

Whether you are fatigued or not, you must keep your professionalism at all times. Of course, as a credit controller you must also be alert, so if the eighth cup of coffee hasn’t hit the spot, then take some time off work.

Recharge your batteries, and think about yourself for a change.

You are helping nobody with your eyes closed.

Invoice errors

Invoices are the most important aspect of any credit control strategy. They must be sent promptly and filled out coherently and accurately.

Any delays or inaccuracies can affect payment and could give customers the excuse to pay late.

Always make sure you address the invoice to the relevant person. Try to avoid sending it to the accounts team, but instead get the director’s name and address it to him instead. Chances are he will pay promptly and respect the direct approach.

Another common mistake is not sending the invoice straight away. Hesitating for too long can again lead to delayed payment, so it’s wise to send the invoice as soon as your goods or services have been provided.

You could even go the extra mile and give your customers a courtesy call to check they received the invoice. This would also offer the customer the opportunity to voice any early issues with payment.

Be aggressive with late payers

While it can be very tempting, it never pays to be aggressive.

No matter how much that late payer messes you around and pushes your buttons, it’s not going to help your case to lose your temper.

While losing a consistently late payer may be no great loss, your good payers will not respond well to overly aggressive tactics and you may lose valued business as a result.

If you need to, politely agree to call the customer back and take a few minutes to compose yourself. After all, if they are really refusing to pay, there are more official and legal routes you can take.

Taking on more than you can handle

While a hard working attitude is certainly desirable in a good credit controller, you must know when to draw the line.

Sometimes a business deems it unnecessary to hire additional help and that is when existing employees are brought in to offer aid.

These individuals take on a heavy workload and are pushed outside of their expertise. This arrangement not only impacts how successful they are as a credit controller but also how they perform in their primary role within the business.

It is therefore wise to seek out help from an external company, like the Credit Protection Association. We will do all the work for you, and allow you and your employees to put all concentration back into the business.

Where to go from here

Being a credit controller can be a hard job.

Your desk is stacked with unpaid invoices, and your voicemail is jammed with excuse after excuse for late payment.

Perfecting that firm, and fair approach is difficult but essential. You should never allow yourself to be intimidated by late payers, nor should you let your assertiveness reach aggression.

At the end of the day, it is in the customer’s best interests that you get those invoices paid. You are fighting on their behalf, and you should succeed on their behalf.

Are you struggling under the weight of unpaid invoices? Are you unsure of your debtor’s identity?

To discover how the Credit Protection Association can help your credit control needs, contact us by the details now!

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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