Top 10 Credit Control Tips

Know your customer before, during and after your business relationship. This can be achieved through performing credit checks, getting additional references and asking for additional financial details, use their accounts from the CRO to assess their position.

Have a clear established credit control policy that is well understood by your entire workforce.

Make sure you have in-depth and well established terms and conditions of trade which contains retention of title clause, allowance for interest on late payment and, procedures to deal with disputes.

Ensure there is a seamless link between sales and credit control, there’s no point selling to a customer who has not paid their last bill.

Constantly review credit limits across your customer base, be wary of sudden large increases in order sizes as it may indicate the customer has had to switch supplier due to potential late payment elsewhere.

Understand credit scoring and CCJ’s. CCJ’s or county court judgements are given against a company that cannot /will not pay. A series of CCJ’s or a poor credit score should set off alarm bells when assessing a potential customer’s credit limit.

Have a powerful debt collection policy-Don’t get a reputation as a soft touch. Your company should have a collections routine that ends with the threat of action…never threaten action without following through.

Be aware of early warning signs and common excuses, prepare rebuttals to the common excuses this ensures your collections team are prepared when collecting your cash.

Contact as many debtors as possible, traditionally the approach is to target the largest debts get them in as fast as possible, our research has shown “polite persistence pays”, contacting all debtors removes those debtors who are sitting on the fence in terms of when they should pay you.

Consider credit insurance as an option, this is especially important for large contracts, without the cash from a large contract, your business could be crippled.

See our regularly updated article Credit Control Tips in a Recession.