10 Steps to Setting Up Your Credit Control System

03 May

When a business gets on top of their credit control, they are likely to experience a lower amount of late payments that can affect the cash flow. Prioritise getting paid by using a bookkeeper Tunbridge Wells or by following these 10 steps to setting up your credit control system:

  1. Set out a credit limit and clear credit terms to ensure timely payments from creditors.
  2. With new clients, check their credit score with a trusted agency to ensure they are creditworthy.
  3. Terms and conditions must be written down and agreed by both parties. Agree on a suitable payment period, a realistic credit limit and late payment interest with the client.
  4. Offer a number of different payment options such as bank transfers, online payments and cheques to make it easy for every type of customer.
  5. Monitor when payments are due throughout the month. If necessary, send clients reminders of the payments, and of the charges of late payment interest that will occur if they do not pay up.
  6. If a debt is not paid on time, let the customer know you can and will use an agency for debt collecting if necessary.
  7. If a customer still does not pay a debt, legal proceedings should begin.
  8. Only use a third party when absolutely necessary as this can put off valuable customers.
  9. Think about offering payment discounts or a reduced next order for early payments.
  10. Consider using trade credit insurance as a backup.

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