News & Articles

What Good Credit Control is About

Credit control is a key process that a small business will complete to ensure that customers do not delay in making payments to their business. It can be very time consuming and costly for a small business to have customer invoices overdue and accounts left unpaid. Therefore, it is important for small businesses to have good credit control process as; it helps avoid delays that can take away the core attentions for your business due to your focus being is elsewhere.

Good credit control is ensuing you execute a step-by-step process which follows a credit control procedure. This is important as you want to ensure that you cover all areas to avoid problems later down the line such as invoice chasing. 

 

A key step that should be taken in a good credit control would be a simple credit check. If you receive an enquiry from a business for your services, performing a credit check would be your first step in your credit control process. This is key as it means you will gather information on the enquiring business and their legal entity and any late payment problems will be highlighted.

 

The other steps which should take place in a business credit control process should a producing a detailed quote for the services you will be offering and financial aspects for this service should be clear as well. The most important part within your quotation should be your businesses payment terms and conditions. If the quote has been agreed then following this should be a signed agreement. This should detail the product or service you are supplying and refer to the quotation with your payment terms highlighted again.

 

Your acquiring company should also complete and return an “Account Information/Account Opening Form.” This should include information of contact details of the buyer, the contact details for the accounts department. A new account should be created to include all contact details. Its important this information is filled out and given back to you in the beginning of the enquiry as it can prove to be a time-consuming task to search for this information further down the line. 

 

 

Once your business has supplied the product or service to your customer then an invoice should be raised. The invoice should contain all the relevant information:

=

Address the invoice correctly (to include a full post code)

=

Send the invoice to the correct person – this may not necessarily be the buyer

=

Include a reference to the buyer of the goods or service

=

Quote any reference or purchase order number you have been given

=

Include a detailed narrative on the invoice that means something to the buyer of the goods or service.

=

Send invoices as soon as possible – not only is this necessary to establish the correct date for VAT purposes, but it also starts the credit-period clock ticking.

Good credit control is not necessarily about ensuing your business has a heavy-duty process but, when you take helpful steps in the beginning of business enquiry to ensure you have covered all the basic steps it means a credit controller has all the information, they need to proceed into recovering what is owed to your business.

 

Contact Us

 

+44 01795 594862

PO Box 267,Faversham,ME13 3AX

M-F: 8am-5pm, S-S: Closed