Member Article

Top Tips for Credit Control in 2023

Here at Commercial Domestic Investigations we know that the start of the year represents an opportunity to adopt new practices and procedures as an SME.

A sales ledger is possibly the most important yet troublesome asset to an SME – fail to pay it constant attention and (dependant on the size of your ledger), within days it can start to affect your cash flow.

Chasing debts can feel like a fruitless task given the hard work of actually attracting the custom in the first place. Then, following the supply of goods and/or services, it is natural to expect payment – however as we all know that is not always the case.

An effective credit control system will help you to maximise your company’s cash flow combined with a disciplined approach, and help from a third party when needed.

That’s why we wanted to put together some expert tips on what you can put into practice to ensure you maximise your cash flow and get paid on time.

Expect late payment – It’s a harsh reality of business that very few companies actually pay their outstanding accounts on time. To prepare yourself for the reality, assume that each invoice will become overdue. This will also ensure that you have the right strategies in place to deal with late payment.

Send invoices ASAP – This one sounds like a no brainer, but there is no room for lethargy in this situation. The sooner you send an invoice, the sooner you will get paid.

Be authoritative – Some SMEs are reluctant to ask for payments that are overdue, as we have previously discussed. This is for many reasons – loss of reputation, fear of losing the customer or it is simply too much effort. A polite but firm approach when requesting payment is sensible.

Pro-active payment reminders – A logical SME will not wait for an invoice to become overdue before reminding the customer, they will call a couple of days before.

Credit check and monitor – it’s important to note that just because your customer passed your credit checking procedure a few years ago, it doesn’t mean they would pass the same check today.

This was posted in Bdaily's Members' News section by Steve Hall .