5 problems every credit controller faces… and how to overcome them
Looking after a business’s sales ledger isn’t always an easy task. And, unfortunately, there are some problems that every credit controller knows too well.
Here we look at five common nuisances for credit controllers and offer tips on how your business can overcome them. We hope you find it useful.
You know the story: you’ve sent an invoice by email or post but when you speak to your customer they claim they haven’t received it, so you have to send another and wait even longer for payment.
In the future call your customers immediately after sending an invoice to confirm that they have received it.
This way, in the event an invoice has been misplaced, you can act quickly to make sure they get a copy invoice and payment is not delayed.
It also gives you the opportunity to check that the invoice is correct and confirm acceptable payment methods.
Cheques getting lost in the post
Poor Royal Mail has a lot to answer for as far as some late paying customers are concerned.
We’ve all heard the age-old excuse ‘the cheque is in the post’ and, whilst sometimes it is true and the cheque does indeed arrive, sometimes it’s used as a stalling tactic to delay paying what’s owed.
If this happens to you check they have the correct postal address and ask for the cheque number and postal date.
Sometimes this can reveal if, in fact, your customer is lying and you can take payment over the phone.
To overcome this problem permanently, as well as the issue of how long they take to clear, consider not accepting payment by cheque altogether. BACS transfer and direct debits offer a far more efficient payment option.
Whilst we know that those in charge of paying the bills are very busy people, it’s still surprising how often they suddenly become uncontactable when a payment is due.
Whether they’re away from their desk, taking a lunch break or on a last-minute holiday, your failed attempts at contacting the relevant person in an organisation could be a stalling tactic.
Be persistent in your efforts to get through and the customer will soon give in and speak to you.
If the person in charge of settling your invoice really is on holiday it’s rare that there wouldn’t be any provisions in their absence.
Ask what these provisions are, and then reaffirm the importance of your invoice and your relationship with the business.
Sales team accepting bad orders
With targets to meet and commission to be earned, some sales teams can become too blasé with the orders they accept and forget the very real and sustained threat of late payment.
To reduce the chances of your team accepting bad orders consider incentivising them once you’ve been paid rather than when an order is placed.
This will reduce the risk of overtrading and ensure staff are focused on those who are likely to pay. After all, a sale isn’t officially a sale until full payment is received.
Not enough time in the day
Especially in smaller businesses, who may not have sufficient resource to allocate to credit control for it to be as effective as it can (or should) be, it can seem like there’s not enough time in the day to successfully monitor and chase invoices.
And with late payment causing businesses to spend even longer chasing overdue payments, the situation only seems to be worsening.
Outsourcing all or part of the credit control function can take this strain away from employees, giving them more time to dedicate to what they know best.
Credit management is what an outsourced credit control agency does every day to get results for its clients, allowing them to deliver knowledge and experience to rival in-house capabilities.
To see if Hilton-Baird Collection Services can help your business get paid faster, please contact our team on 0800 9774848 or email firstname.lastname@example.org.