Credit control – more important than ever
More so now then ever credit control has become a bigger part of my role as accounts administrator at Sue Hill. If you don’t chase the outstanding debt then guess what? They don’t pay! You need to keep on top of credit control and keep the cash flowing.
Most clients are trying their very best to hang on to their money for as long as possible until after one, two or sometimes three phone calls they decide they had better pay up. By then they could be 40 days overdue. You need to adopt a chase policy if you are going to be successful in chasing debtors.
- Give a call as soon as the invoice is due that way you can iron out any obstacles before it becomes overdue.
- Always use the phone as your first point of contact
- Always get something from them i.e. a date when the invoice will be processed or a day to call back to check it's been processed.
Credit Control is a very important part of any business as it’s the main point of keeping the cash flowing. As the recession bites it is gratifying to see that our clients are continuing to pay their invoices promptly. Cash flow is particularly important for recruitment companies who have a weekly wages bill to pay. By the time the client gets their invoice around 80% of the invoice value has already been paid to the temporary worker. Every month we also pay a percentage of those invoices to HMRC for Tax and NI and VAT.
You will find that just spending one hour per day chasing debtors will make a huge impact on your cash flow. Once debtors know you are on the ball and are expecting you to call as soon as the invoice is coming up to be paid, they will think "Let's just pay and get it out the way and save the phone call." Believe me this does happen.