Company Credit Control & Cash-Flow Management
It’s the first working day of the month – your priority job should be chasing those invoices due to have been paid by the end of last month, the longer you leave it the bigger the problem will become, 100% guaranteed.
Aged debt will expose your cash-flow , eventually running it dry and increase your susceptibility to bad debt. At the end of the day why should you subsidise another companies cash flow – in effect you are giving them a free loan, paid for by you. Outstanding debt is the nemesis of any Credit Department, putting a block on a customer can destroy a long-standing corporate relationship, and wreak havoc within the sales team. But aged debt will be the first thing your Manager, Director or Co-owner picks up on, and when asked the question, you will need to have straight and to the point answers.
As a Credit Controller do you find yourself asking any of the following questions :
- Is your Debtors List increasing?
- Are your customers exceeding their agreed payment terms?
- Is your cash flow starting to dry up?
- Do you spend time stressing about unpaid invoices?
- Are you concerned about the financial position of a customer?
- Have you not been paid for an invoice and are unsure what to do next.
The simplest problem to deal with is the last one, simply pick up the phone and ask the customer what’s going on. More than likely it’s a simple oversight – however it could just as easily be an imminent sign of what’s on the horizon.
How tight are your new customer account opening procedures, do you Credit Check all new customers and adhere to the credit levels advised, or do you offer them credit ad hoc? They may be coming to you because they are on stop everywhere else. Are you monitoring your customers for any changes to their current credit ratings, and are you being informed of downgrades due to Late Payments and CCJ’s? Monarch and Carillion went bust with multiple notifications of both, and yet companies still offered to open new accounts for them and to extend their credit.
Do you know the exact entity you are trading with, and have you got the correct Company Number for them? Invoices to that exact company name and address, with the correct contact details will hugely increase your chances of being paid on time, and greatly increase you chance of success should you decide to go down the legal road to get paid in a Court of Law.
If you, or your company, or you know of anyone who’s company has suffered, or is suffering from these Credit Control issues , Late Payments, or bad B2B Debt, we have the systems and procedures in place to help improve their cash-flow dramatically, and to recover outstanding invoices at Zero Cost with no commission.