Running a successful business is all about cash flow. You need to make sure you have enough money coming in to cover your expenses, and that includes debt repayments. One of the most important aspects of cash flow is credit control. If you don’t have a good credit control process in place, you could find yourself struggling to keep up with your payments.
Every year, numerous start-ups and small firms in the UK fail because they lack cash flow. One of the main reasons for this is slow-paying clients. Your company’s ability to expand will be jeopardized unless you establish a clear credit control procedure.
In this blog post, we will discuss some key considerations for improving your credit control process. By taking these steps, you can protect your business against late payments and improve your overall cash flow.
Before Working With Clients
One of the most important aspects of credit control is setting clear payment terms. You need to be clear about when invoices are due and what the consequences are for late payments. This will help you avoid any misunderstandings with your customers.
As soon as an order is placed, ensuring your business receives the money it owes in full and on time is critical. Here are some vital measures you should take before accepting any new orders.
– Vet new customers thoroughly
– Get credit insurance
– Set clear payment terms
– Send invoices promptly
– Follow up on late payments immediately
Getting Paid For The Work You’ve Done
It’s crucial to implement a clear and coordinated procedure for credit control. The period between the sale and the due date for an invoice is arguably the most important stage in credit control. Here are five crucial actions that companies should take to improve their performance.
– Continuous credit monitoring
– Timely credit decisions
– Appropriate credit limits
– Proactive debt collection
– Improved cash flow forecasting
– Thank all your customers that pay on time!
If you want to improve your credit control process, these are key considerations that you need to take into account. Implementing these measures can help protect your business against late payments and improve your overall cash flow.
Tackling Late Payments
It’s critical to act promptly once credit terms have been exceeded in order to recoup the debt and monitor the potential cash flow impact. Here are some of the ways in which you can minimise the impact.
– Negotiate with the debtor
– Chase as soon as credit terms exceed
– Don’t hesitate to take action
– Charge interest
– Bring in the experts
Depending on the situation, you may need to take different actions in order to recover the debt. However, it’s important to act quickly in order to minimise the impact on your business.
The longer a debt lingers, the more difficult it is to collect. There will eventually come a time when you’ve exhausted all possible options to recover the debt yourself, making it important you make the most of all the resources at your disposal.
Take Control Of Your Credit Control With My Debt Recovery
By taking these steps, you can protect your business against late payments and improve your credit control process. If you’re not sure where to start with credit control, we can help.
If overdue or late payments are impacting your cash flow or taking time away from growing your business, reach out to discover how we can help!
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