The importance of Credit Control

The function of good credit control is to:

1. Maintain good cash flow
2. Reduced debt
3. Promoting good customer relations and promoting prompt payment
4. Liaising with sales and working as a team
5. Develop and maintain company policy on credit control

The above all contribute to marinating healthy company profits!

What should you look at for good credit control procedures?

1. Check for credit – references from suppliers and set credit limits. It is important that once you have set a credit limit that this is not exceeded or extended without further consideration
2. Review your terms and conditions – do they reflect your current practice and requirements for the business. Remember when looking at the credit terms consider offering a discount for quicker payment
3. Do you have the right person/people in place to carry out efficient credit control – have they been adequately trained? How do they handle disputed invoices and slow payers?
4. Everyday procedures on credit control:
   a) Invoice promptly
   b) Call the customer to ensure goods arrived or service was satisfactory
   c) Set aside regular time to chase the late payers start with the largest and oldest debt first
   d) Also find out if customer has not brought from you in the last 6 months
   e) Attempt to resolve quires and disputes as soon as possible
   If the customer is struggling with payment offer instalment payment plan
5. Review your costs on disputes, write offs and debt recovery – how much is it costing your company.

It is important to review the costs of efficient credit control and know how to improve your system

For more information about our credit control services email info@liquidrecovery.co.uk or call 0113 268 5768.
Liquid Recovery would like to thank you all for a wonderful year and wish you all the best in 2011.

  

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info@liquidrecovery.co.uk
Tel: 0113 268 5768
Fax: 0113 268 5723

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