5 Simple ways to improve your credit control
Many of our clients are reporting a return to the bad old days of late or non-payment.
At best it can create potentially expensive cash flow problems and at worst it can result in your business becoming insolvent. So we have put together just a few simple ideas of how to minimise the problem based on our experience.
- Consider using online credit rating agencies to get a credit check. This is an important step if the customer represents a significant percentage of your turnover.
- Ensure terms and conditions are clearly displayed on contracts, order confirmations and invoices. That makes it harder for companies to claim they “didn’t realise” you were on 30 day terms.
- Supply accurate information such as P/O number on invoices and provide a clear and detailed description of products or services. Unscrupulous companies will use mistakes or lack of detail as an excuse to query your invoice or just not pay.
- Follow up your invoice if it hasn’t been paid on time. Neither the postal service nor email are completely infallible and you might find non-payment is a genuine mistake.
- If non-payment persists (and don’t accept on-going excuses) then remember that you can threaten legal action and that you are entitled to claim interest on overdue payments under The Late Payment of Commercial Debts (Interest) Act 1998.
If you want to set up processes that reduce the likelihood of bad debt then call Lewis Smith & Co. on 01384 235549 or email firstname.lastname@example.org
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