Minimise debtor days with effective credit control

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 you must take a positive approach to credit control and minimise the risks of debts becoming overdue. In order to do this:

1.  Make sure your credit control team communicate with each other and the rest of the company:

  • 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 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 include an all monies clause, allowing you to pursue all invoices if payment terms are not adhered to.

2. Ensure you have Terms and Conditions (“T&Cs”). Make sure they are incorporated into all your contracts with your customers and ensure they include provisions for interest, compensation and recovery of legal costs.

3. Establish a procedure for credit control, in accordance with your T&Cs and follow it. For example a payment terms of 30 days:

  • Send invoice.
  • On day 15 send a statement enclosing details of your dispute procedure.
  • On day 30 send a letter informing the customer that the invoices are due for payment.
  • On day 45 call the customer to advise them that the invoices are overdue and interest and compensation will be added to the amounts if not paid.
  • On day 60 take action – send to Else Solicitors for legal action.

4. 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:

  • Commence County Court proceedings.
  • Serving a Statutory Demand.
  • 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 Chris Else on 01283 526200 or email

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