3 smart resolutions all credit controllers should make in 2019
As 2019 approaches it’s the perfect time for credit controllers to look back on their efforts and plan ways to improve going forward.
So, to help you set yourself a solid and achievable New Year’s Resolution, here are three smart ideas you could adopt in 2019 along with some top tips to help you achieve them.
1. Ditch manual processes
Slow paper-based systems and a lack of automation not only waste your time, they have also been labelled as one of the biggest causes of late payments.
This suggests that by ditching your manual payment processes you’ll not only be working more efficiently, you could also improve payment times.
So, if you haven’t already, 2019 could be the year to consider adopting automated systems in order to improve your credit control performance.
2. Get tough on late payment
Despite government attempts to curb the problem, late payment continues to be a nuisance for SMEs.
Not only is it frustrating, it also takes time away from other aspects of credit control and can put significant pressure on cash flow.
Therefore, it’s important that as we enter 2019 you take a tough stance on late payment.
To be most effective your late payment procedure should be apparent from the very start of your business relationship.
A good way to do this is to include it in your terms and conditions. This shows from the start that you take late payment seriously and could act as a deterrent.
Your late payment procedure can include tactics such as charging late payment interest, outsourcing the debt to a commercial debt collection agency or taking legal action.
Whichever process you decide to follow it’s important that you stick to it as the longer an invoice remains outstanding the less likely it is to get paid.
3. Spend more time focusing on cash flow
When your business experiences late payment there are two things you must consider: how you will go about collecting that debt and what you will do about the impact on your cash flow.
However, often the focus is so fixed on chasing the payment that maintaining a healthy cash flow is neglected, and this can have serious repercussions for any business.
Therefore, if you don’t want to become the one being chased for outstanding debts in 2019, it’s essential that you spend some time focusing on cash flow.
If you know that a late payment is going to leave you short you could negotiate an extension to your credit terms with suppliers, request earlier payment from another customer or seek additional funding.
You can also proactively reduce the impact on your cash flow by introducing some additional steps into your procedure.
Will you be adopting any of these resolutions? Or do you have suggestions of your own? Let us know in the comments below.