Is it worth outsourcing your credit control?
Don’t let credit management turn into debt recovery. Cashflow is king and every business relies on money coming into the business to pay their outstanding invoices and debts. Its quite simple but a lot of businesses use a reactionary process rather than a pro-active process to collect outstanding debts.
What we mean by that is that they only start chasing outstanding monies when they realise they have gone over their due date. Their debtor may be intending to pay but the longer you leave it the longer they may leave it to pay.
Furthermore, that time spent calling your debtors could be better spent actually doing your own work and compare that to your billable hours or the cost of another employee chasing outstanding invoices to that of an outsourced credit management controller can be significantly different.
A credit controller will set aside time to speak to your debtors and will contact them prior to the invoices becoming overdue. It will begin with a courtesy call to ensure they have the invoice and ensure that all the details are correct and possibly another quick call prior to the due date to ensure the invoice is on the payment run.
If there is going to be a problem with payment, then a credit control manager should be aware of this before the invoice is overdue and can try to rectify the situation before the due date. Alternatively, it may lead to preparing a debt recovery specialist to become involved as soon as the invoice is due.
Work with your credit control manager to ensure you make it as easy as possible for your client to pay so all information has to be correct on the invoice.
Ensure you have the following
- Correct Address and the right person
- Correct product/service details
- Ensure all calculations are correct
- Ensure VAT registration number etc is clearly visible
- A unique invoice number
- Bank details to pay or details of other ways of paying if applicable
Also ensure that you have agreed payment terms with your client, if they know when they should pay by they can not argue they were unaware of the time limit. Also make sure your credit controller knows all the terms and conditions.
How can we help?
We offer a bespoke affordable credit control option that allows you to concentrate on your business. For a low monthly fee per account you can have the peace of mind that your invoices will be handled professionally.
We will also help you with your terms and conditions to ensure that both parties are aware of their commitments.