Why is credit control so important and how can credit control management be improved?
Cash flow is arguably one of the - if not the - most important element(s) of any business; not only ensuring your invoices, and employees or subcontractors are paid on time, but also confirming that you’re able to confidently invest in new projects & initiatives, as well as hire new employees where necessary - allowing your business to grow.
As such, it’s vital that the credit control processes currently in place within your business are both efficient and effective, and any individuals managing the process have the necessary tools to achieve this. So, how can credit control management be improved?
How can credit control management be improved?
Credit control management can be improved by adopting and/or streamlining the following process and tasks -
Research new clients: right at the very beginning of the credit control process is researching new clients before onboarding them - sometimes overlooked, especially by time-poor small businesses busy with a multitude of other tasks - researching new clients will reduce risk, save time, and make informed decisions around payment terms & conditions.
Invoice accurately and to an agreed time: ensuring your invoices are dispatched as soon as orders or services are fulfilled and checking them for errors and discrepancies before they’re sent is an extremely effective way to improve your credit control procedures; providing clients with accurate, timely and error-free invoices they cannot dispute or do not have reason to delay the payment of is the greatest way to secure quick payments.
Make payment easy: making payment as easy and stress-free as possible, whilst also providing different payment options, will help to encourage clients to pay their invoices quickly - nothing’s more frustrating than having to grapple with a payment type you’re not used to or don’t often use!
Encourage open and honest communication: fostering good relationships with your clients and encouraging open and honest communication is an easy yet effective way to improve your business’ credit control process - this can be as simple as a courtesy email to confirm they’ve received their latest invoice or a quick phone call to check in and make sure all work is being completed as expected. It’s all too easy for people to forget about an invoice or get distracted by other things - keep front-of-mind by regularly communicating with your clients.
Set out clear terms & conditions: setting our clear, easy-to-understand and indisputable payment terms & conditions early on in the relationship with a new client will help minimise risks and mistakes.
Monitor your accounts & forecast: having a clear, up-to-date view of your accounts and forecasting your cash flow will help you understand your current and future positions, and plan accordingly or check in with potential late payers should you need to - keeping a close eye on your accounts is a valuable form of risk management.
Automate where possible: automation is a credit controller’s best friend! Any emails you can automate or late payments you can flag up automatically after the due date has passed will help you improve processes and productivity immensely. What’s more, having a clear view of KPIs and any vital statistics that can impact your cash flow will help you identify areas of concern in a timely manner, allowing you to plan accordingly
How CreditForce can help
CreditForce has been designed to offer a total solution to credit control management - an intelligent solution that addresses collections, risk and working capital management.
Offering cash and billing forecasting, query management, exposure tracking and collections target management, CreditForce maintains a constant focus on lock-up and DSO reduction.
Alongside this, CreditForce provides users with an interactive dashboard, allowing you to measure every A/R, working capital and SRA RCAB KPI with ease and at a glance; even providing real-time accounts monitoring.
In fact, CreditForce is proven to reduce DSO by 30% and increase productivity by 50%!
In short, there are a number of things you can do to improve your credit control processes; research new clients, make payments as easy as possible, monitor your accounts, and automate aspects of a role - CreditForce can help.
To learn more about CreditForce, please click here or request a demo.