What is Effective Credit Control?
Having an effective credit control function within your business can have a huge impact on your cash flow. Your credit control should use the most appropriate processes and procedures for yours and your customer’s business to ensure you are paid quickly and on time, as well as maintaining positive business relationships.
What indicates effective credit control?
Organisation in credit control can be a number of things. Firstly, customers should be organised based on the collection strategy required for that customer type. These categories should then inform your organisation of when and how these customers will be contacted; your customer should be organised by customer strategy and largest value first to ensure the highest return on your time spent chasing.
Your customers should expect contact from you on a regular basis; by doing this your customer should eventually understand when payment should be made. I’ve come across many companies that would wait until cash flow was tight to chase all invoices; in doing this your customers will often forget about your invoice, and a positive customer relationship cannot be built.
Although very similar to consistency, persistence should be present for all customers that take longer to pay. By persistent I mean to call on a regular basis to receive updates, let your customer know the exact date you will be calling and stick to your word. By giving your customer a deadline this should spur them into action for a quicker resolution.
Friendly / positive credit controllers
I’ve said it many times, but credit control is much like sales in that it is a customer facing role that builds a relationship between your business and your customer’s. Your credit controllers should have a friendly and positive demeanour towards customers. They should be able to handle difficult situations with customers easily, and maintain a calm demeanour throughout.
There are many more facets that go into a successful credit control function, to learn more visit our Collection Strategy Toolkit.