Posted 4 years ago by AccountsPortal Tracy
Effective credit control is essential to maintaining a healthy business both in the short and long term. And there are many simple ways to ensure your credit control contributes to business success.
Set a Credit Management Policy
Laying down your credit management policy in writing and ensuring all staff understand and work to it, is the easiest way to avoid many of the trappings of credit.
Consider the level of profitability you need to generate from your business and how this is going to relate to the level of debt you are able to take on. Those with lower gross margins will need to keep a much keener eye on credit control for each individual client, whereas those with much higher profit levels can be more flexible when it comes to lines of credit.
Implement a Comprehensive Monitoring System
Make sure you are confident that you have the systems in place to monitor your lines of credit, in and out of the business, and take the necessary action when things do not go to plan.
The best online accounting software will provide flags when credit control does not meet your set targets, giving you the greatest opportunity to turn the situation around before it starts to impact on overall business performance.
Ensure invoicing is timely and accurate and that each customer is repaying on time and to date, with a clear understanding of what the implications will be for late payers.
With precise and concise information, the overall picture will be a lot clearer to see, so make sure that you don't get weighed down by too much data.
Make it easy for your customers to pay
Your customers will pay you faster if you provide them with simple and easy ways to pay. For example, you can ensure that your bank account details are always visible or, preferably, integrate payment mechanisms such as paypal or credit/debit card payment into your online invoicing.