Often small businesses provide products and services on credit, by doing so your business is vulnerable to slow payment. This in turn can have a disastrous impact on the cash flow of your business and in the worst case scenario leads to insolvency.
Effective credit control begins with clear terms and conditions prior to engaging in a contract with your clients, it is important to have this in place as it is legally binding. If actual physical goods are exchanged, it is essential that you can clearly identify your goods and have a Retention Of Title in place, preferably with the receivers company stamp and an authorised signature.
Maintaining effective communication with your creditor is equally as important, this can be a time consuming and intimidating experience especially when you have to deal with the larger business concerns.
Credit Control Services Include:
- Implementing Terms and Conditions of payment, legal status of goods (if applicable), Retention Of Title and any late payment charge structure (detailing the relevant section of the companies credit act).
- This must be set up prior to the first delivery / agreed business activity with your clients but can also be customised into the clients invoice or quote.
- Make contact with your creditors, establishing a point of contact.
- Issue reminder letters at intervals set by you (30, 60, 90 days).
- Track all communication.
- Calculate additional interest charges, trade discounts and settlement discounts.
- Provide credit control reports, keeping you informed of developments and timings of expected payments.
- Assisting with legal action.