Improving Credit Control

Getting Customers to Pay On Time !

Cash flow problems are the root cause of about 75% of business failures in the UK. Many of these businesses were profitable but failed due to weak credit control and the resultant cash flow problems.

Many UK organisations have a credit control department, yet few of its members have any formal training in credit control. Whilst gut feel and day-to-day experience are a good foundation for this key role, there are many procedures and techniques that can strengthen the effectiveness of the credit control department.

In many organisations credit control begins after the customer hasn’t paid on time, this is often too late. This practical and pragmatic course examines the whole process of credit control, starting from before the sale is made and extending through to the legal recourse available when payment is overdue.

For whom
The course is for anyone working in credit control who wants to expand their skills and effectiveness. It’s also for managers who have responsibility for a credit control team, but have no experience in that area themselves.

Many smaller organisations (and some larger ones!) sell to customers on credit, yet have no process or strategy for effective credit control. This course will benefit them as well.

Aims and objectives
This is a high practical workshop. It aims to help participants understand how to build and manage an effective credit control process.

Specifically, it provides participants with procedures to vet customers before the sale is made, and to agree enforceable payment terms. It enables participants to build a process of “ordinary payment” to ensure customers pay in time. This includes identifying holes in their system which give customers a valid excuse to pay late. Participants will also build a process for dealing with obstinate payers. Finally the issue of legal action will be tackled: how to take legal action; when to do it ourselves; and when to pass it on to the lawyers.

The course divides into 5 related sections.

1. Cash flow and the role of credit control
This section looks at cash flow within a company, and the role of credit control within cash flow
• the cash flow cycle
• case study
• business insolvency

2. Before the sale: vetting customers and agreeing terms
Many credit control procedures begin after the customer hasn’t paid on time. To be effective, the process needs to begin before the sale is made
• vetting the new customer
• agreeing your terms
• gathering information
• application to your business

3. Encouraging prompt payment: the “normal” process
Given a little encouragement many customers will pay on time. But, given the opportunity, they will happily pay later. Chasing for payment often needs to begin well before payment is due. A robust system will help prompt payment
• invoicing promptly
• the holes in the system: excuses for late payment
• ensuring the invoice is valid
• customer data issues
• professional and courteous relationships
• know your customer: chase early
• just before the due date
• application to your business

4. Dealing with obstinate customers
Some customers always pay late and need firmer management
• a system of communication
• keeping records and holding customers to their promises
• finding allies within the customer
• warning bells
• putting the customer on stop
• suspending credit facilities
• clever tactics
• application to your business

5. Taking legal action
Sometimes legal action will be the only option
• keep the customer informed
• do it yourself: the summons
• bringing in the professionals