No one likes to be left waiting around to be paid. This is why it is so important that you have an effective credit control process in place.

Unpaid invoices are the bane of many business owners’ and credit controllers’ lives and cause a huge amount of stress for organisations of all sizes.

When the situation gets out of hand you may be left with little option but to get a commercial debt recovery partner involved to help collect what you are owed.

Thankfully, with better credit control, you can increase your chances of being paid quicker without the need to recover overdue invoices.

Steps to more effective credit control

Credit control doesn’t need to be complicated. But it does need to have a clear process and it is vital that you are extremely diligent.

Here are steps you can implement today for more effective credit control to help avoid the need for commercial debt recovery.

Stringent business credit checking

Credit checking and monitoring is one of the most fundamental components in a robust credit control process.

Credit reports give you insight as to what your customer’s track record is like for making payments on time, what a suitable credit limit would be based on their payment behaviour and ultimately how trustworthy they are deemed to be.

There are also credit monitoring services available where you can also be alerted to any changes to a customer’s credit report that could impact your business. Having access to this sort of intelligence quickly is hugely beneficial, particularly if you have customers with large amounts of credit.

Agree suitable credit terms

Credit terms are also a critical part of any effective credit control process.

Without setting appropriate credit terms that suit both yourself and your customer, you could run into trouble very quickly.

There’s a balance you need to meet when setting credit terms. You need to be able to accept large orders from your customers to accelerate revenue growth, but you also can not afford to leave yourself vulnerable by granting more credit than your customer can afford to repay within a specified time.

You should also keep your own cash flow predictions and targets in mind when setting credit terms. If you need paid within 30-days make sure this is made clear, it would be insanity to then grant 60-day payment terms in this instance.

Make it as easy as possible for your customer to pay you

Good credit control is having processes in place that allow you to get paid quicker. Therefore a crucial, but sometimes overlooked, aspect of credit control is making it as easy as possible for your customers to pay you quickly.

Accepting multiple methods of payment does exactly this!

You should also clearly state instructions on how your customers can pay you on the invoices you send.

Send invoices promptly

The quicker you send your invoice, with clear instructions on how to pay you, the quicker you will be paid.

Being lax with your invoicing and not sending them promptly will only extend the time it will take for you to get paid. As soon as you accept an order you should be creating and sending an invoice to your customer.

Check all invoices for any errors before sending them

Working in the commercial debt recovery industry for almost 15 years we have seen every excuse under the sun for late payment, and it is staggering how many of these blame errors on invoices.

Your attention to detail needs to be on point when creating invoices as every aspect needs to be correct.

These are the most common errors we see on invoices:

• You customer’s name and address are incorrect or wrong spelling used.
• Including the wrong items and prices on the invoice.
• Not making your own business name and address clear on the invoice.
• Not including payment details or having incorrect details.
• Invoice number and dates are incorrect.

Keep on track with when payments are due

Having a firm grasp of what invoices you have outstanding and when you can expect them to get paid means you will be able to adhere to an effective chasing schedule.

A chasing schedule is having a clear plan to chase outstanding invoices when they become late.

Many businesses will send a payment reminder around the day an invoice is due to be paid followed by a series of chasers once an invoice is overdue.

Being organised knowing exactly what invoices are outstanding, their due date and when you can expect them to be paid is crucial to an effective credit control process.

Learn more with our guide to sending payment reminders and chasing late payment!

Getting help with commercial debt recovery

Following good credit control processes will mean that you will have less commercial debt. Unfortunately though, even the most stringent credit control processes can still result in unpaid invoices.

For this reason, it is always worth having a plan B to recover commercial debt.

If you don’t act fast to recover unpaid invoices you run the risk of losing out on collecting what you are owed. The longer your invoices are outstanding the higher the risk of the debt being uncollectable.

Darcey Quigley & Co are here to support you and your credit control department in the event you have a problematic customer with outstanding commercial debt. Darcey Quigley & Co was founded to provide a quick stress-free solution for collecting overdue invoices.

Communication is key to successfully collection commercial debt. Our approach places communication with both you and your debtor as a priority contacting your late payer regularly and keeping you updated every step of the way.

Acting quickly to collect what you are owed is also vital to effective commercial debt recovery, and this is why we action all cases within just 1 hour of taking your case on and work quickly to recover what you are owed quickly and efficiently with the average case being paid out within just 16 days!

If you have problematic late payers or an unpaid invoice causing you concern we are here to help. Call our credit management specialists free today on 01698 821 468 or schedule a call at a time that suits you here.