A huge amount of businesses are forced to close every year because customers are not paying their invoices. At Commercial Domestic Investigations, we don’t want you to become part of that group and so we wanted to share some foundations of credit control that you can put into action. For an SME it can be difficult to stand up against, what seems to be, infinite competition and endless payment terms. A logical and achievable credit-control policy can help you to stay on track and save you from sinking.
Research you customers
Take the time to carry out a background check on your customers. Speak with other businesses that have traded with them to unearth any problems that may have occurred. Carrying out a credit check on your customers gives you an idea about their payment history and financial position. Use this information to set an upper credit limit and once you have set one, don’t negotiate.
Set minimum orders
Create a sales contract with your customers, those who benefit from credit terms should be made aware that goods received belong to you until a payment has been made in full. These terms will show your customer that you will not be taken advantage of.
Get to know your customers
Every business is different, some will pay invoices as and when they receive them, others will pay all invoices on a specific date. You are not obligated to offer 30 day payment terms, do what is right for your business. Take into consideration your customer’s payment practices when deciding on payment terms, this will make them feel valued and they will appreciate the genuine effort taken to try and accommodate them.
Keep customer service in mind
Customer service is important to all branches of your business, this includes credit control. More often than not, a happy customer leads to repeat business. Calling your customers to ensure a delivery has been received or to see if they are happy with the service provided allows you to gain feedback that can be used to attract new business but also gives you the chance to confirm payment details and reiterate the payment due date.
Create a credit control policy that suite your business and most importantly, stick to it. This procedure should establish clear instructions for handling invoices and collecting payments. Invoice customers within 24 hours of products or services being supplied. Set aside time each week to chase payments, this will make it part of your regular routine. Remain consistent and have an escalation procedure in place for when you have difficulties collecting a payment. Consider employing the services of a third party to collect more difficult debts, this allows you to focus on other accounts.
At Commercial Domestic Investigations, we understand how important it is to have a strong credit control policy. We have a range of services to assist your credit control from credit reporting to invoice collection. We take the time to understand your business and your requirements. If you would like to speak to someone about your credit control, contact our team on 08444 159200 or email firstname.lastname@example.org.