10 credit control lessons we learned from Santa Claus
Santa Claus is coming to town – and he’s bringing lots of top credit control tips with him.
Whilst business guidance may not be top of your Christmas wish list, you won’t want to miss these 10 credit control lessons that you could learn from Santa Claus.
He rewards good behaviour
Everyone knows that if you’ve been good you’ll probably get what you asked for, but if you’ve been bad you’ll wake up on Christmas morning to a sack full of coal. Your customers too should know what will happen when they pay on time and when they don’t.
Often just thanking your prompt payers is enough to encourage them to pay on time in the future. But have you considered offering early settlement discounts to incentivise your customers to pay on time? The discount percentage needn’t be excessive, nor apply to every customer, but just enough to encourage early payment and improve cash flow.
More importantly, you need to make it clear what will happen if your customers miss payment deadlines and end up on your naughty list. Make sure your terms and conditions include a section on your late payment procedure; this can include charging late payment interest and outsourcing the debt to a collections agency. Often this will be enough to encourage customers to pay on time, every time.
He pays attention to detail
When Santa makes his list and checks it twice he’s extremely careful to make sure no mistakes are made. Your business should take a similar approach to your invoicing. Making mistakes on your invoices not only makes your business look unprofessional and unorganised, it could also lead to disputes on payment and be costly for your business. So, like Santa, be diligent with each and every invoice you send out.
He takes the time to get to know his customers
Every year Santa takes the time to find out who’s been naughty and who’s been nice, and your business should too. Offering credit to customers who can’t or won’t pay can be devastating. But the risk can be reduced by using credit reports which allow businesses to instantly check a company or director’s credit rating online, allowing you to make quick, informed decisions about who you do business with.
And he doesn’t just make his list once. Santa redoes the list every year to make sure he gets it right. Likewise, credit checking shouldn’t be a one-off event when the first order is placed – it should be an ongoing task. Even the most reliable customers may have a change in circumstances which could affect their ability to pay on time.
He’s got a system that works
Ever wondered how Santa manages to only work over the Christmas period and then spend the rest of the year relaxing with Mrs Claus? It’s all down to good planning and a system that works. With an efficient procedure in place your credit control too can be plain sailing. Clearly set out a day-by-day strategy and make sure you train staff appropriately so that all stages are adequately completed and meticulously stuck to. This credit control procedure should include every step, from the moment the order is placed until the invoice is paid.
He loves his job
Santa is always jolly and most of that is because he gets joy out of doing his job. He loves his work and whether he’s in his workshop, out on his sleigh or meeting his fans he’s always smiling. And as a credit controller you should love what you do too.
But, unfortunately, with late payment putting increasing strain on small businesses many companies are falling out of love with credit control. If the task of credit control is becoming too burdensome for your business, outsourced credit control companies can take on the task for you. Their passion and commitment to the job, combined with their extensive expertise, will often see better results.
He always listens
Every year Santa takes the time to meet with his adoring public and lets each child sit and tell him what they want for Christmas. His impeccable listening skills and genuine interest in the needs of children all over the world means he is never short of fans.
The relationship you have with your customers should never be underestimated. Like Santa your business can benefit from a friendly and positive relationship with your customers. Not only will it encourage them to purchase more goods and services from your business, it will also improve the chances of getting paid on time – the more they like you, the less likely it is that they’ll keep you waiting.
He never loses his cool
Have you ever seen Santa get angry? Of course not. Being jolly is part of Santa’s package and even when he’s got loads of work to do he never lets his stress show. This is an extremely important skill that all credit controllers need to learn.
Whilst listening to excuses and dealing with difficult customers can be hard work it’s important to never lose your cool. When it comes to credit control, you need to be firm but fair. Being aggressive towards customers is unnecessary and could damage relationships and your brand.
He hires good people
Santa Claus would be nothing without the help of his elves and reindeer. They do an impeccable job in making sure that the toys are ready and that they all get delivered in time for Christmas morning. And your credit control will benefit from a good team too.
When hiring credit control staff, or even when outsourcing to a debt collection agency, you need to make sure that your company is being represented in the best way possible. The key is finding employees and/or a debt collection partner that will respect your brand as much as you do.
He always keeps his promises
Every year Santa promises to deliver toys to all the little girls and boys. Can you imagine what would happen if one year he decided not to bother? There would be mayhem of course.
Likewise, you need to make sure that you always do what you say you’re going to or your customers will lose faith in you too.
If you don’t follow up with your customers when you say you’re going to, they will think you’ve forgotten about it and could stall payment for even longer.
He’s not afraid to work hard
On the night before Christmas Santa travels the world delivering presents so that, on Christmas morning, all the children wake up to a stocking filled with presents. If one year he decided to take it easy there would be lots of upset little children.
Likewise, credit control can be hard work. To keep cash coming in on time requires dedication, persistence and a lot of hard work. But the more you put in the more you can get out of it. And if you apply strong credit control processes for a short period and then slacken off, you’ll lose many of the benefits. The key to success is to be consistent in your efforts.
If your business is struggling to allocate the time and resource that’s required for effective credit control, our outsourced services could help. Call 0800 9774848 or email firstname.lastname@example.org to discuss your requirements.