Credit control is one of those systems that some companies may not pay attention to or may even ignore. This could come back to bite them, especially if they are an SME or freelance business. But why is this?
Well, first and foremost, credit control ensures the safety and future security of your business. It is the system used by businesses to ensure that credit is only given to customers, who are able to pay and to do so on time. Thus, it is a vital component in making your company successful. Because what is a business, if there is no money?
So, what can you do to ensure your credit control process is successful?
Before you extend a credit limit to a client, it is a good idea to check their credit score. It gives you the ability to see any tell-tale signs.
- Set limits and be clear
Set a credit limit that is right for your business and make sure you stick to it. Also, make sure that your business sets out clear credit terms from the beginning to your customers. Transparency is always respected.
- Prompt invoices
If you deliver invoices promptly to your customers, you are likely to receive prompt payment.
- Chase with confidence
It is inevitable that you will have customers that will pay late, so be sure to chase them. However, be confident and don’t back down. It is an awkward situation but there is nothing wrong with a friendly reminder. And if you still feel awkward about chasing customers or worried about how it will affect your relationship, perhaps get someone else to do it.
Reward those that pay early with incentives, such as a percentage off.
- Keep track
Make sure you keep track of the goings-on, this is information that you should be on top of.
- Have a second option in place
Just in case it does go a little pear-shaped, it may be a good idea to have a good legal option in place.
As always, if you would like more information on this topic then do not hesitate to get in touch.
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