Minimise debtor days with effective credit control

Every business knows that cash is king. The best way to monitor cash flow is with effective credit control.

To ensure you get paid for your services and reduce debtor days you must take a positive approach to credit control and minimise the risks of debts becoming overdue. Establish a procedure for credit control, in accordance with your T&Cs and follow it.

Some things to consider:-

  • Know who you trade with i.e. whether your customer is a sole trader, a limited company, a partnership or a limited liability partnership.
  • Obtain all relevant information about your customer prior to trading – registered address, trading address, date of birth, contact numbers, credit reports and accounts at Companies House – having this information will make the credit control easier.
  • Talk to your customers regularly, specifically ensure that they are aware of your terms and conditions and payment terms.
  • Undertake regular credit checks against your customers to research their financial status, as this may change in a short period of time.
  • Ensure your customers know your procedure for disputing an invoice so problems can be identified in advance.
  • Consider safe guards in respect of high risk customers, for example cash on delivery; payments on account or personal guarantees.
  • Ensure your terms and conditions allow you to pursue all invoices if payment terms are not adhered to along with your legal costs.

If your customer does not pay at the end of your credit control procedure, then do not be afraid to take action. This may include:

  • County Court proceedings
  • Serving a Statutory Demanding
  • Issuing a Winding Up Petition

Else Solicitors aims to be an extension of your credit control team. For more information on how to improve your credit control procedure, please contact Laura Charles on 01283 526200 or email laura.charles@elselaw.co.uk.

🎉 Celebrating 20 years in business.
🎉 Celebrating 20 years in business.

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