Advice managing credit control

Discussion in 'Cashflow forum' started by DavidWH, Jul 28, 2017.

  1. DavidWH

    DavidWH UKBF Enthusiast Free Member

    1,164 204
    We're a small family business, and my time like most SME's is split between many responsibilities.

    One area I know we're rather lax is on credit control. As a general rule we don't give credit to customers, however we've a few good, long standing customers who pay well, and a number of newer larger customers who credit was extended as part of the deal, and we've benefited from recurring work.

    I've looked at automation, but the volume doesn't really warrant automation. We use Sage Instant Accounts, as it does everything we need, and integrates with or MIS.

    I'm now trying to think of a way to make credit control part of the day to day business, just wondered how others manage their debtors.

    I'm inclined to set reminders on our Google Calendar, which is displayed in our office for all to see.

    I'm thinking of having a set process for credit control, and dealing with debtors, hopefully giving an impression we're on the ball, and reduce the debts.

    Again looking for advice, as I have a habit of overthinking, and complicating things!
     
    Posted: Jul 28, 2017 By: DavidWH Member since: Feb 15, 2011
    #1
  2. STDFR33

    STDFR33 UKBF Big Shot Free Member

    3,552 861
    Hey up,

    How large is the business? Do you have staff dedicated to just raising invoices? Or is fone at point of sale or automated through a website?
     
    Posted: Jul 28, 2017 By: STDFR33 Member since: Aug 7, 2016
    #2
  3. DavidWH

    DavidWH UKBF Enthusiast Free Member

    1,164 204
    Just the two of us. No e-commerce and everything is a bespoke quote, then invoiced through our MIS, and sent into sage for accounting/VAT.

    Most are paid pro-forma, but the larger, more frequent accounts are provided with terms.
     
    Posted: Jul 29, 2017 By: DavidWH Member since: Feb 15, 2011
    #3
  4. STDFR33

    STDFR33 UKBF Big Shot Free Member

    3,552 861
    Are the records kept up to date? Or can there be a lag due to time constraints, for example?
     
    Posted: Jul 29, 2017 By: STDFR33 Member since: Aug 7, 2016
    #4
  5. DavidWH

    DavidWH UKBF Enthusiast Free Member

    1,164 204
    Credit account receipts are entered whe received, the pro-forma/credit card payments are reconciled monthly, along with supplier payments.
     
    Posted: Jul 29, 2017 By: DavidWH Member since: Feb 15, 2011
    #5
  6. STDFR33

    STDFR33 UKBF Big Shot Free Member

    3,552 861
    Then I would run daily debtor reports from Sage.

    Once an account is overdue by say 7 days, you can send them a polite email reminding them that the payment is overdue and their account is currently on stop until payment is received.

    If you run the report daily, if one of these customers calls to place an order, you can tell them that their account is on stop until payment is received. Try do it politely though :)
    If you do a script and memorise it, it won't be embarrassing for the customer, and it will ensure that money is coming in when it should.
    If the large customers are ordering frequently, you could offer to process this order, but that you will need payment ASAP - get their name and ask when you can expect a payment to be made. If it's not made, you can proactively call them to see why the didn't make the promised payment, or you can enforce the 'stop' on the next order and give them the name of the person that promised payment.

    It's just about running the reports, seeing who is due and badgering them for payment.

    To ensure that payment is received quickly, you need to do your party too and make sure that PO numbers are quoted etc so that the invoice doesn't end up in the black hole of 'in query'.
     
    Posted: Jul 29, 2017 By: STDFR33 Member since: Aug 7, 2016
    #6