What Is Credit Control? (+ How To Keep On Top Of It)

Credit control is the practice of making sure your customers don’t take too long to pay you. (Learn more here).

Keeping on top of credit control is crucial for businesses to maintain healthy cash flow and minimise the risk of bad debt. With a good credit control process in place, you will have a stress-free process that means you get your money on time and see the benefits of good cash flow. Here are some key steps businesses can take to manage credit control effectively in the UK.

Set Clear Credit Policies

Establish clear guidelines and policies regarding credit control terms, credit limits, payment terms, and procedures for granting credit to customers. Ensure that all customers are aware of these policies upfront.

Credit Checks and Customer Evaluation 

Conduct thorough credit checks and evaluations of new customers before extending credit. Use credit reference agencies or trade credit insurers to assess their creditworthiness and payment history.

Credit Agreements and Contracts

Ensure that credit agreements or contracts are in place with customers, clearly stating the terms and conditions of credit, including payment terms, interest rates, late payment fees, and any additional charges.

Invoicing and Statements

Send accurate and timely invoices to customers promptly. Clearly state payment due dates and provide detailed statements of account regularly to keep customers informed about outstanding balances.

Promptly Follow up on Late Payments

Monitor payment due dates closely and promptly follow up with customers with overdue payments. Send reminders, make phone calls, or use automated systems to ensure customers know their outstanding balances and the consequences of non-payment.

Offer Incentives for Early Payment

Encourage prompt payment by offering early payment discounts or other incentives to customers who settle their accounts ahead of schedule.

In conclusion, it’s important to always be clear, accurate and honest with your customers. At Modina, every effort will be made to collect on time with the pre-due date chase-up, and then friendly yet authoritative contact will take place with the first letter and chase-up all with our experts introducing themselves as being from your company.

If you could benefit from our credit control service, call 020 7183 8241 or email info@modina.co.uk to find out more.