Business Garage continues our weekly #toptips for #bookkeeping series. Week three – credit control.

Credit control is often the least favourite area of many business owners, but is also one of the most important and if done right, can be highly effective.

  1. Get your invoices out at the earliest opportunity. Invoice in advance if you can.
  2. Keep a regular eye on your sales ledger for debts due or overdue. Establish a weekly routine.
  3. Build a positive relationship with customers. Be clear that you have correct invoicing details from the outset and once the invoice has been sent, follow up with a courtesy call to check that it has been received.
  4. Email a reminder ahead of the due date and ask for confirmation that the invoice is being paid by the due date.
  5. If the payment due date has passed, call your customers – it is harder to ignore a telephone call, compared to a polite email. Be polite but firm.
  6. If you are pressed for time, focus on the larger debts first.
  7. Revisit your processes if you find you are constantly doing credit control:
    • Does your invoice template need simplifying?
    • Are your terms and conditions clear?
    • Are you producing invoices quickly enough?
    • Payment methods – BACS is the quickest way to receive cash, have you included your correct bank details on the invoices?
    • International payments – have you included IBAN and BIC on your invoice? Ensure that if you are billing in currency, you are able to accept currency payments into your account.
  8. Be prepared to take action:
    • Send out an overdue notice 7 days after the due date
    • Send out a final notice 14 days after the due date
    • Send out a legal notice 21 days after the due date
    • Each letter should give 7 days to respond
  9. Be prepared to follow through and file a claim.

We work with clients across Oxfordshire, Berkshire, Thames Valley and London. For help with credit control, contact Business Garage on [email protected] or 01235 433099.