Credit Control

Benefits

Credit control is a system within your business that minimises the risk of unpaid invoices, in addition to only giving credit to customers who are able and likely to pay. Credit control is not as simple as sending invoices on time. In fact, there are many aspects that must come together to properly manage your company’s credit control.

So, what are the benefits of a Credit Control system?

• Automated
  Streamline debt chasing processes by automating many of the day to day credit control tasks such as reminder letters and placing overdue accounts on hold.
• Protects
  Promotes good cash flow management allowing you to prepare for the future.
• Faster Payments
  Minimise late payments with convenient “Pay Now” buttons on emails, invoices as well as statements directing customers to pay via Worldpay or Opayo.
• Clear and Accurate
  Improved visibility of actionable and retrospective data which also leads to more refined forecasting and financial planning.

Why is credit control so important?

Credit control is important for a number of reasons as it affects every part of your business! If you allow your credit to get out of control, with customers consistently making late payments or not making payments at all, the consequences can be severe. However, there are many other reasons why credit control is crucial to your business:

• Cash Flow
  Late as well as badly managed payments can quickly cause cash flow problems. When cash flow gets obstructed, businesses are sometimes forced to do drastic things to keep things moving smoothly. For some businesses, this even means that taking a salary cut may become necessary. By managing your credit control properly, you avoid this extreme situation.
• Wasting Time
  The most common problem caused by credit control issues is inefficiency as well as wasted hours. The amount of time it takes to deal with unpaid invoices, send out reminders, and go through the whole debt collection process is enormous, but it doesn’t have to be! If your credit control processes are optimized, then your business will minimize the amount of time spent on debt collection.
• Bad Debt
  In the worst-case scenarios, some debt may also need to be written off or pursued in court. This is a scenario that no one wants as it will ultimately leave the business in a less than profitable state.
• Bad Relationships
  In the end, if your debt collection processes are not handled properly, then it can leave your customers with a bad image of the business.

Credit control management

Credit control implicates many elements and processes of your business. That’s why there are a number of ways to manage it properly, from the beginning of a customer relationship but also long-term. A credit control system from EBS will allow you to:

• Stay on Top of Billing
  Right from the moment you send an invoice you can also include credit control best practices in your process. Invoices should be sent out without delay and should always be double checked for complete accuracy. As fixing even the smallest issue on an invoice after it’s been sent out can cause a huge delay for you when it comes to receiving your payment.
• Adopt Useful Software
  Using electronic invoicing is one of the best ways to send out invoices as quickly but also as accurately as possible.
• Keep Track of Payment Delays
  You can keep track of customers who have been known to make late payments as well as have a history of problems with their invoices. These customers should be followed up with a few days after being sent their invoice, in order to provide a prompt reminder. Customers will then have less of a chance of further pushing back or forgetting their payment.
• Automated Chasing
  A credit control system can pre-empt overdue invoices by sending out very polite pre-emptive reminders so this means that paying you is at the forefront of your customers’ minds.