Credit Control for all businesses is vital. Sound over the top? It really isn't and its up to each and every business owner to make sure that there is a procedure in place and being followed.
A lot of people find Credit Control boring, one of those
jobs for another day. It’s not everyone’s
choice of job, in fact I am the only person I know who actually likes it. As I sat in a Bookkeepers office a few days
back talking about the status of a clients accounts they started to yawn and
said that “this is how Credit Control makes me feel”.
As business owners it is each of our responsibility to
ensure that we have Credit Control covered. Cashflow for any business is vital, and
without it, you and your business will most likely come to a grinding halt. Your business could explode and not in a good way. Take a moment, if your business ceased to trade
as of now, what would happen, and I mean really happen, to you, your lifestyle,
wife/husband, children, home, animals, car etc?
Take a moment to think about how much it costs to run your business per
month and any debts you have there, how much you pay yourself and where that
money goes, how much you pay anyone who works for you and where that money may
go. You should know what figure you need to have in your account per month to run your business. If your business has no funds, can you personally bankroll it?
When was the last time you looked at your Debtors Report in your accountancy package and actually looked at what you have due and overdue? Do you have a debtors list but don't have anyone who can make those calls, don't know how or like to make these calls? Get in touch. Don't let your debtors list get out of control. Run a debtors report weekly and keep on top of it.
Not everyone likes asking for money, there is a skill here
in how you ask but do you know what the most important part of Credit Control is
in my experience? Picking up the phone
and making time to build good, solid relationships with you clients. If you take valuable time out of your day to do this you will be at the front of their minds when payment run
comes round. Show that you care about your clients and value their loyalty,
any future business and repeat sales is more than likely to come your way as a
result. You and your business could also
be recommended to others by your client.
Of course, this works both ways. If your clients would like to receive for example preferential rates and time slots from you,
then need to show you how much they appreciate you and your business. How do they do this? Pay your invoices on time is one very good way. Also, if there are any problems you would ideally like them to pick up the phone and talk to you. It is likely that they will only feel
comfortable to call if the basis of a working relationship is already in place.
If you have nothing in place, then outsourcing Credit Control to a business such as SB Credit Control is a great asset and solution for you and your business. In doing so, you are saving money, cutting losses and increasing cashflow. How? You are saving money by not employing A.Nother which has the added expenses of a salary, holiday & sick pay, pension, insurances etc. Cutting your losses by chasing in monies that are owed to your business that you may have written off as a loss before. This helps to increase your cashflow, think about this and combine it with a call in advance of invoice due dates checking that invoices are ready for payment as per T&C's. This is potentially going to result in a reduction of debtor days, help close the gap on what your T&C's are and your current debtor days.
You may want to introduce Credit Control inhouse, or have what is place revisited. SB Credit Control offers consultancy for Credit Control Procedures, The Application of Credit Control Procedures, and The Importance of Cash Flow to your Business.
Cash flow needs to do just that, flow. Technology is changing how we work and live
at an incredible rate. We need to keep
up with the times and be able to invest back into our businesses to attract
quality future employees and customers.
If the business is not running up with the times and to the latest
highest standards that both employees and customers expect, you will not
attract the best people to your business.
We need to keep on top of all monies coming in so that you can invest in
yourself and your business. If cash is
not flowing, the very important thing to remember is that it will stop, if you
have nothing coming in, what goes out will halt and so will your business. You have bill and salaries to pay, materials to buy, vehicles to run.
I started my business because I am passionate about small business survival in particular. I am a strong believer that if you have invoiced for business completed and there are no issues then you should be paid, and paid on time. How you go about this really is a skill, it's in your best interest to be calm, personable and professional at all times should payments become overdue.
A further benefit of outsourcing to SB Credit Control is that it works as a complement to your business, and therefore enhances existing or helps create working relationships between you and your client.
In brief - Pick up the phone, strike up a good basis of a working relationships, send in completed invoices with the right information the first time, contact clients before invoices are due to ensure they are on systems for payment. Each week review your debtors report and act on it. Get a Credit Control Procedure in place.
