Some Easy Tips For Effective Credit Control!

Posted by Racing Credit Control on May 1st, 2019

One of the most important ways in which businesses can function smoothly is by undertaking proper credit control functions. Without the funds being paid to you on time, the cash flow of your business can get adversely impacted and thereafter a chain reaction begins in which everything simply seems to be falling apart.

Many most of the business owners take too long to realize that they need to immediately start the processes for avoiding bad debts upon the placing of an order. It is a process which begins with knowing about your customers at the time of sale till the time they actually make the payment. To avoid bad debts, many companies choose to outsource credit control functions to a third party organization.

To make sure that your business cash flows do not dwindle, here are some tips for effective credit control.

1. Identify Those Who Perpetually Pay Late.

Once you start chasing the creditors for payment on a regular basis, it will come to light what each customer’s payment routine is? This will give you a better understanding of how you can approach different customers and what strategies can you use to make them pay on time. For instance, you may only need to politely ask for payment from some of them and others will require you to be rigid and stern. You must also be clear whether or not some of such clients require reminders before the due date to make the payment. Do people respond better over telephonic conversations or emails?

2. Prioritize Your Collections.

You will need to persistently chase high-value creditors so that they pay on time and you receive more returns. For smaller amounts, you can stick to notifying via emails or faxes. However, when the collective amount for these transactions is high, you must immediately begin chasing the creditors or else your other consumers might assume that they can get away with making delayed payments all the time.  

3. Accurately Mention All The Details In Client Records.

Specifying even the minutest of details is a great strategy for Effective Credit Control. These details must have all the details mentioned and should be easy to apprehend even by others who manage the accounts. Go through the previous notes from clients before you approach them for making payments. Wait for a while before calling them if the records mention that the customer has committed to making the payment in a few days.

4. Set Time Bound Deadlines For Customers.

You must notify every customer clearly by when they are supposed to pay the entire amount. If the collection amount is huge, you can set different intervals at which they can make the payment so that there are no defaults. When calling them to ask for payments, you can inform that you will call back again to know the payment status. This will let the creditors know that you are not someone whose payment they can avoid for long.

5. Escalate The Matter If There Is A Need.                                           

If you need to ring up your client’s office again and again and do not receive a positive response from their executives, do not hesitate to speak with the senior managers regarding the payment. Once the matter escalates to them, there are high chances that you will receive your payments within just a few days of it.

We hope that the aforementioned tips for effective credit control will help you to manage your cash flows from creditors in the right manner. You may hire a reliable credit control agency to assist you in this process if you have time restraints or are otherwise unable to induce the creditors to pay on time.