For recruiters across the UK, credit control can pose a significant hurdle in their efforts to maintain and improve cash flow. Whilst a rather arduous task for many business owners and managers to complete, credit control is a vital part of the day to day running of a business, without which a business will experience substantial setbacks, if not risk its survival.
Is it time for your agency to outsource credit control? Below we look at five signs that it’s time to call in the experts.
Late payments have been a scourge for industries across the UK for many years. In the last few years poor payment practices have been brought into the spotlight, particularly with regards to larger businesses taking advantage of smaller suppliers. For the recruitment industry, late payments can severely impact cash flow, due to the fact that the agency is waiting even longer for payment from a client whilst still having to pay candidates promptly. Late payments are often a sign of ineffective credit control practices that do not follow best practice chasing.
Lack of time & resources
Chasing for payment, particularly for recruiters with many clients, can take an inordinate amount of time, and therefore requires adequate resources in order to carry out credit control effectively. Having a separate credit control role is simply not feasible for many recruiters, and therefore chasing takes managers and staff away from their core responsibilities. Outsourcing this function will ultimately save an agency precious time, leaving staff members free to grow the business.
Difficulty in tracking customer accounts
One of the main factors of great credit control is to ensure you keep a thorough track record of all contact with a client, as well as payments made and monies due. This in itself can take time but will prove highly beneficial when reviewing an account with a client, therefore if your agency isn’t already tracking customer accounts in detail, we highly recommend you begin, or pass along this task to an outsourced expert.
Lack of confidence in chasing for payments
For many, credit control is understandably a nerve-wracking task to complete. A skilled credit controller needs to have high levels of confidence in speaking to and negotiating with customers when it comes to chasing for payment. Whilst it is a customer facing role, and should for the majority of the time, be a positive communication with a client, at times customers can become irritable and therefore a credit controller must also know how to handle situations such as this in a polite yet firm manner. Often times, lack of confidence in carrying out credit control, will lead to it being put off, meaning an agency is waiting even longer for payment.
Deteriorating client relationships
Poor credit control practices ultimately lead to a deterioration in client relationships. Customer service should be a priority when chasing for payment, therefore if a client relationship is suffering, this is an area that must be looked at. From experience, we have found that proactive and positive credit control brings more results and adds to a customer relationship.
Have you noticed any of the above signs in your business? Then it may be time to outsource your credit control.