10 WAYS TO IMPROVE YOUR CREDIT CONTROL


 

Credit control is a set of measures and procedures adopted by a business to ensure that its customers pay their invoices.

Here are a few tips for you to consider in order to optimise your business’s credit control.

 

1.     Make your payment terms very clear

  • Include your payment terms on contracts and invoices
  • Don’t forget your credit period and the interest charges on overdue payments

 

2.     Run credit checks on potentially large customers

 

3.     Build good relationships with the people that pay your invoices

 

4.     Generate clear and accurate invoices

  • Don’t give clients the opportunity to delay payment by querying their invoice
    • Ensure that the descriptions of the products or services provided are correct
    • Include the client’s order reference number
    • Send the invoice to the correct person

 

5.     Always send invoices out on time

  • Rather than wait until month end, why not send invoices out immediately after the products or services have been delivered?

 

6.     Create a credit control process

  • Have a schedule for chasing payments. For example:Always adhere to your schedule!
    • When to invoice
    • When to send out statements
    • When to chase payments
    • When to chase payments in firmer manner
    • When to threaten legal action
    • When to implement legal action

 

7.     Chase late payments immediately

  • Phoning clients tends to be more effective than emailing or sending letters
  • Keep a record of phone calls (date, time, person spoken to, what was discussed) as well as copies of emails and letters

 

8.     Deal with excuses

  • We often hear the same excuses for the non-payment of invoices, so have an answer to each of them in order to push past them and receive your payment!

 

9.     Change your credit policy for problematic clients

  • Don’t supply customers again until their accounts are up-to-date
  • Don’t give clients that are bad payers extended credit – maybe even reduce their credit limit

 

10.  Thank customers who pay on time! Let them know that you appreciate it.

 

Thanks for taking the time to read this article! Please feel free to post a comment.

Ian Blackburn of Assured Bookkeeping (Pty) Ltd

 

 

 

 

Advertisements

About Assured Bookkeeping (Pty) Ltd

Providers of bookkeeping & payroll services, accounting and tax services
This entry was posted in bookkeeping and tagged , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s