Everybody hates credit control. It is that one job that is super important, nobody wants to do it and it always gets put off until another day. But, cashflow issues are the biggest killer in any small business so keeping your credit control under control and up to date is vital. Here’s our top tips to help make this hated job as simple as possible:
Account details
Make sure you have all the account details correct and that you’ve invoiced the right company. Nothing is more annoying for both you and your clients than sending off invoices to the wrong person or wrong department or having an email address wrong. Be sure to get all the correct account details before you raise the invoice – if they need an order number make sure you’ve got one. If you can send off an invoice addressed to the person that will be processing it, you are halfway there.
Payment Terms
Getting these sorted up front means there is no confusion down the track. Make sure your expectations are communicated in your terms of trade which have been agreed to before starting the job or supplying the goods / service. If your terms of trade are 7 days and that’s what has been agreed, then don’t be afraid to enforce them. Often people will try and drag out the payment as long as they can so making the expectation clear at the start and enforcing it should eliminate this problem. If your payment terms are quite long then look to reduce them. Payment 20th of following month is common in business but depending on your industry 7- or 10-day terms are also common. Don’t be afraid to review yours.
Invoice immediately
Send your invoice as soon as possible, the sooner it is received by your customer the sooner you are likely to receive payment. Embrace the technology available in your accounting software to help you achieve this – use technology like recurring sales invoices to streamline the process. If you’re not using accounting software, then maybe it’s time to take a look at it. This also allows you other options such as taking payments online. The more you can automate the process the simpler and more efficient it will be.
Make payment easy
The easiest way to have your credit control under control is to not have to do any. If you’re in an industry where its possible to take payment either up front or at the time of doing the job then use technology to allow you to take mobile payment or to automate the payment through your accounting software. The easier you make the process of taking the payment, the more likely you are to be paid in a timely manner. There are several payment options available through online accounting software or mobile devices available for debit and / or credit card payments.
Don’t be afraid to chase payment
Regularly reviewing your debtors and chasing those that haven’t paid every single week is vital to staying on top of your credit control. Make sure all payments have been allocated and then run your aged receivables report from your accounting software and chase those that are outside your payment terms. Not using accounting software? No problems – use Excel if you prefer.
Communicate, communicate, communicate
The easiest way to ensure you don’t have a credit control problem is to communicate your expectations, terms and be open to a discussion should any problems arise. Like everything in business, it is all about relationships.
Take that next step and get your creditors under control – let us help! For more information phone the team on 04 2329199 or fill out your details below and we will be in touch.
