Many associate the term ‘credit management’ with the very end of the process when a client has received their invoice and payment is being chased. However, truly effective credit management will start right from the outset of any prospective client relationship.
So how can your business improve its credit management function?
Credit checks
Before any agreements have been made and any contracts have been signed, we would always recommend carrying out a company credit check. Whilst this isn’t a guarantee that they will pay you on time, every time, it will identify if there have been previous issues with payments to suppliers (e.g. CCJs).
Know and communicate your terms
Whether your credit terms are 30 days from the date of invoice, 60 days or even payment on receipt of invoice (prior to work commencing) ensure that your client knows and is able to meet these terms before your relationship begins.
Ensure accurate invoicing
One of the most common reasons for late payments is inaccurate invoicing. Whether it’s the agreed cost, accurate company name, correct recipient email or even your bank details, ensure everything on an invoice is accurate and clear.
Prompt chasing
Once an invoice has been sent and is due, it’s time to chase for payment. As one of the few customer facing roles in a business, your credit control function should be highly trained in customer service; their purpose isn’t to argue with clients but to work with them effectively to encourage prompt payment in the future.
Seek expert support
Of course, business owners are inundated with responsibilities, and often credit management can fall down the list of priorities. To overcome this, bringing on expert support from a third party, whether it be for invoicing or credit control, can make all the difference. Not only are they experienced in effective credit management, but they will also free up your time to focus on other areas of the business.
Are you looking for business support? Zodeq 360 could be the perfect solution. Get in touch with our team today!
