6 Tips for Effective Credit Control
 
Being a business owner comes with many challenges, especially when it concerns money. 
 
You have to have enough money to run the business and pay yourself and your employees which means you have to price your products/services correctly. Then, the biggest monetary challenge that most owners have is credit control. Also known as, getting invoices paid on time! 
 
Many businesses operate not knowing what their month-end payments will be, but this is not sustainable. After all, you can only run out of money once. 
 
In this article, we give you 6 credit control tips so you can get paid on time AND build a consistent cash flow... 

Tip #1 – Write a ‘Credit Control Policy Document’ and use it 

Create a formal company policy document for your credit control procedure and help your staff follow this process. Over time, your credit control procedure will be a robust, repeatable working practice. 
Create a formal company policy document for your credit control procedure and help your staff follow this process - advice from accountants in Farnborough

Tip #2 – Perform Regular Credit Checks 

The time spent performing regular credit checks on your clients will save you so much time wasted on chasing late payments later if you offer credit to those who cannot or will not pay. Perform these financial status checks and you can make better, informed decisions about whether or not to trade on credit terms. 
The time spent performing regular credit checks on your clients will save you so much time wasted on chasing late payments later if you offer credit to those who cannot or will not pay - advice from accountants in the Hampshire county

Tip #3 – Automate your Invoicing Process 

Creating invoices, sending invoices and chasing invoices all take time, so automate this process. Streamlining this process not only helps with your efficiency, but also increases the likelihood that invoices will be paid on time and within agreed terms too. 
Creating invoices, sending invoices and chasing invoices all take time, so automate this process - automate processes so to not have to worry about unpaid invoices needing to be chased

Tip #4 – Diarise Courtesy Calls 

The longer you take to follow up on late payments, the bigger the gaps in your cash flow AND the higher the chances of clients paying even later or not at all. To rectify this, consider making courtesy calls before your invoice is due. A call is extremely effective in reducing the likelihood of late payment as anyone can ignore an email. 
The longer you take to follow up on late payments, the bigger the gaps in your cash flow AND the higher the chances of clients paying even later or not at all - Trying giving a courtesy call, calls are harder to avoid than an email - advice from accountants in Farnborough

Tip #5 – Prioritise Chasing Overdue Debts 

Chasing invoices takes a lot of time and effort, so prioritise overdue debts first. You need to get these paid as soon as possible as it will only get harder to collect as time goes on. 
Chasing invoices takes a lot of time and effort, so prioritise overdue debts first.
Things will only get harder if you spend all your time chasing, you need to pay off debts first - prioritise these first and formost! - Advice from accountants in Farnborough

Tip #6 – Review your Process Regularly and Train the Necessary People 

Review your credit control at least once every month so you know exactly who owes you money, how much money you are owed, and who needs to have tighter credit terms. Use this time to also improve your procedure and to make sure that the necessary staff has had sufficient training and support to perform their job effectively. 
Use this time to also improve your procedure and to make sure that the necessary staff has had sufficient training and support to perform their job effectively.
Review your credit control at least once every month so you know exactly who owes you money, how much money you are owed, and who needs to have tighter credit terms.

Reduce the Gaps in your Cash Flow 

Late payments can result in more debtor days and significant cash flow gaps. This is NOT good for business in the long term, so make sure to implement these 6 credit control tips. If you outline a credit procedure, automate what you can, perform regular credit checks and make some key courtesy calls, you can ensure consistent month-end payments which will help you build a healthy and sustainable cash flow. 
make sure to implement these 6 credit control tips. If you outline a credit procedure, automate what you can, perform regular credit checks and make some key courtesy calls, you can ensure consistent month-end payments which will help you build a healthy and sustainable cash flow - advice from accountants in Farnborough
Published by Callum Williams - Business Administrator and Marketer 

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We are Specialist Accountants serving plumbers, builders, electricians and all other trades, providing business advice, compliance, bookkeeping, CIS, tax returns, payroll, VAT, management accounts and cash flow forecasting 
Or call us on 01252 856 150 

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