Good credit management can make a business. Bad credit management can break it!
So, this is the year to get on top of your cash flow, get outstanding debts sorted, and get your invoices paid on time.
Here’s our essential guide to transforming your credit management in 2020:
Check your invoices
Make sure payment dates are clear and that they are addressed to the correct person.
Do they include a warning that you will charge late fees and interest? They should!
It’s a sad truth that people are more likely to pay creditors who press for payment on time. So, ensure they know you will be chasing payment the minute the invoice becomes due.
Get a dedicated credit controller
Either appoint a member of staff or outsource your credit control to a specialist business. This will help you keep on top of payments and ensure good cash flow.
Bring in a credit management agency as early as possible
If you have problems getting a client to pay a debt to you, seek advice at the earliest stage possible.
That will ensure you do things in the correct way, follow the letter of the law, and can draw on the experience of people who have spent decades in this sector – just like we have at Inter Alia.
It also means the process becomes far less personal and takes the heat out of any potential conflicts.
Trace your debtors
If they have ‘disappeared’, it will only be a matter of months before they surface on electronic databases. Our experts will help you track them down and contact them.
Use a doorstep connection service
This will re-establish contact with debtors and your agents will be able to find out what their financial position is, and whether they are able to pay their debts or enter into an arrangement to pay.
Get good legal advice
You’ll need to decide where to pursue your debt (in the County Court or High Court, for example) and whether you need to obtain a CCJ or High Court judgement.
Inter Alia helps clients make these decisions with expert legal advice, including access to barristers who will appear for them in the High Court.
Use experienced enforcement agents
Qualified, experienced enforcement agents understand their role, the law, and what they can and cannot do. They are able to repossess assets such as vehicles and office equipment to the value of the debt you are owed, provided the High Court has made that judgement.
They can also encourage your debtor to enter a payment arrangement with you.
What are the benefits of setting up an effective credit management system?
- Better cashflow – Enabling you to pay suppliers and staff.
- More funds for growth – Many businesses are held back by late payments or debts. Without that problem, you can invest in new machinery, staff, or technology.
- Less stress – Business owners have so much on their plates. Stressing out about payment problems should not be a regular issue for them. If the focus is on that, how can entrepreneurs create new products or services, market the business, or recruit new people?