10 tips to improve credit control

“Cash is King”

The reality facing businesses today is that in the short-term it’s very survival may well depend More on it’s ability to generate “Cash” than “Profits”
Credit Control has a vital role to play in generating Cash (the life blood of businesses)

How do we improve collections ?

Some tips to help

1) Establish your credit policy and communicate it clearly to both staff and customers.

2) Monitor closely the payment history of existing accounts and identify opportunities for quick improvements (low hanging fruit). The riskier accounts which will require more micro-management.

3) Assign collection tasks to relevant staff (sales reps, managers, accounts staff) with action dates and follow up timeframes

4) Remove barriers to payment – in the current climate it is vital that you remove as many barriers to payment as possible for your customers.
a) Make sure invoices are accurate
b) Invoices should be timely and sent to the right people
c) Invoices must contain the relevant information such as customer purchase order number, buyer references etc
d) Customer credits and sales returns need to be processed promptly
e) Send out Customer Statements promptly and to correct people.

5) Analyse reasons for Credit Notes and review processes to reduce volume.

6) Where possible email statements and invoices to customers.

7) Ensure that customer receipts are allocated promptly and accurately.

8) Incorporate an element of sales rep incentives around collection targets and customer debt aging profiles

9) Know your customer payment cycles and their employees who approve payments and those who process the payments and try to establish good relationships with these key people.

10) Where possible keep customer notes on your accounting system so that relief cover or new employees can quickly get up to speed with customer accounts. Follow up, Follow up, Follow up

Improving Credit Collections can have a huge impact on cash flow and business survival/growth. Investing your time and technology to make this process more efficient can reap rich rewards.