Are you taking your Credit Control seriously?
Why are so many companies failing to take credit control seriously? Perhaps it is because so many businesses are too timid towards late-paying customers.
Do you use any of the following reasons:
” They’re well established customers of ours; they do pay, even if it is always late.”
“They are a good customer of ours – we do a lot of business with them.”
Perhaps, and most alarmingly. you may use the most frequent reason for not enforcing your credit control:
“We don’t want to risk losing future orders by getting heavy with them over payment terms.”
So the real question is, do you honestly believe that allowing your customers to dictate payment terms to you, will ultimately help your business survival?
In reality, businesses trading styles and products differ widely, and therefore, so do staff in customer facing positions. They will want to establish good customer relationships. To many in the business, goods and services being provided shows a constant and reliable customer.
For us who work in credit control, the definition of a good customer is one who pays promptly within the previously agreed credit terms.
We know that you give credit to ensure greater profit for your business, but you need to ask what positive benefit there is for your business in allowing your customers credit terms on either thirty, forty-five, sixty or ninety days?
We believe that effective credit control starts at the customer acquisition and is part of good commercial awareness. It is the responsibility starts at he top, with the Managing Director, the Finance Director and the Sales Director who should all create the right message to cascade downwards to all employees.
To get credit control working properly the following key areas need to be covered:
Deciding what credit to give a customer – the risk profile of the company you are doing business with must be understood.
Set specific credit limits for a customer and impose them.
Chase debt when it is about to become due.
- When working with large companies, understand their processes and procedures and adapt to ensure you yet paid.
For many companies, credit control is a task which no-one wants to undertake. For us, it is a vital part of ensuring a company survives and flourishes.
If you want to find out more about Credit Control or how Brookstand can help you, either fill in our contact form or call us.
You will find out more about Brookstand’s Credit Control services here.