TLC Loves… getting paid when you should
9th June 2017
This month we’re pleased to bring you a guest blog by Rob Lewis of Corporate and Commercial. James and I have worked with Rob and the team at Corp & Comm for more than ten years and they have helped many clients with tricky invoice situations, as well as providing a regular credit control service.
We asked Rob to give us his top tips for getting paid.
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We love accountants and we especially love TLC. Like us, they can be a quirky bunch and they love their figures. So here are a few figures to kick things off:
-A typical small business wastes 130 hours p.a. chasing invoices.
-In pounds and pence the recovery fees alone equate to almost £11,500 p.a. per company or, £11 Billion p.a. across the whole UK SME sector.
Admittedly we’d like to earn a little more of this £11 Billion but for now, let us give you some free advice to maximise your chances of being paid and hopefully save you time and money that can be put to better use.
The Ten Commandments of successful credit control
1. The Golden Rule – Treat every customer as a potential debtor. They may not become a debtor but have the correct mind-set from the start.
2. Get an Account Opening Form. You need to know who you’re dealing with.
3. Do your due diligence. Secure credit checks and check the internet for information about the customer.
4. Check any purchase order. Make sure it’s the same people who’ve ordered from you that you’re dealing with.
5. Send an order acknowledgement. Avoid arguments by confirming what is to be done, before it is done.
6. Reduce your exposure and risk. Work out whether you can charge for an element of the invoice up front.
7. Invoice promptly and correctly. You can’t get paid if the customer doesn’t have a bill to pay.
8. Have a set credit control process. Have a chase system that includes reminder emails and calling scripts.
9. Have a letter of claim. Ask for your money officially, in a way that could be referenced in Court.
10. Have an exit strategy. Source an industry expert to turn to when all else fails.
Credit control is simply financial administration between clients. Like most things in business, it’s usually common sense.
Get yourself a process that works, that you’re comfortable with and use it on every occasion, no matter whom the client is nor the value.
Remember, making credit control a routine and regular process takes away the fear and anxiety faced by business owners when it comes to speaking to their customers about money.
If that doesn’t work, engage in Commandment 10!
Corporate and Commercial are a leading credit control agency in West Yorkshire. Having been industry specialists for the last 20 years, our knowledge of debt recovery and credit control is unparalleled. For more free hints, tips and advice visit our website.