The lifeblood of every business is a healthy cash flow. Bad debts are sometimes a result of poor credit control and can harm business cash flow the most. A good credit control policy maintains a smooth cash flow. Credit is a two-way function. Your suppliers give credit to you and you give credit to your customers. If your customers do not pay on time, you may have difficulties paying your suppliers on time. A good credit control policy ensures that your customers pay on time, your suppliers are paid on time, your cash flow remains vibrant, bad debts are not generated, and business success is facilitated. Herein lies the importance of credit control to your business.
Key Factors of Credit Control ?Know your customer. Offering credit is like lending money. As you do not lend money to total strangers, similarly, you should not give credit to unknown customers. You can make them fill credit application forms and get online credit ratings by using the services of a credit reference agency, to check the credit worthiness of your customer. ?Order details. The details of the order should be correctly noted down and approved by the customer. ?Invoice promptly. Delays in invoicing result in delayed payments. Keep the invoice simple to understand, containing all the relevant details. Some businesses need statements of outstanding invoice payments, hence send the statements on a weekly or a monthly basis. ?Enlist the services of a factoring provider. Some finance companies offer factoring services, which can be provided on either a disclosed or confidential basis. The advantage of using a factoring service is manifold, which includes improvement of cash flow, and chasing of debts. The entire credit control exercise is provided by the finance company on your behalf and this ensures that invoices are paid on time. You are also free to concentrate on getting orders and fulfilling them, rather than spend valuable time chasing payments. ?Chase payment. If you do not want to use the services of a factoring provider, then follow up with your customers by phoning them and making personal visits. Certain customers may make excuses for not paying. Keep them high on your chasing list. ?Update the stop list. Inform your employees of the latest stop list to prevent further credit being given to late payers. ?Send Claim Letters. After your invoice is due and not paid, send Claim Letters to build up your case, if legal action is required at a later stage. ?Maintain a good relationship. A good positive relationship ensures timely payment. Before taking legal action, speak to the managing director or the finance director explaining your situation. ?Take legal action. A good credit control policy is formulated to avoid legal action. However, as the last resort, opt for legal action, if every other recovery attempt fails.
From the moment you have your first business idea, through the periods of growth and development, Inksmoor and our Business Partners can provide the debtor and funding solutions to help make that path easier. ? Inksmoor are dedicated to providing effective and tangible debtor and funding solutions to suit your company's growing needs ?Why Inksmoor? ? We have a professional dedicated team who together have over 25 years experience in accountancy, business finance, banking , credit control and account management. ? We can find the best solution for you because we have had first hand experience at the ?sharp end? of a business and we understand all the issues that can complicate collection of debts and financing growth. ? Our Services Include: ?? -Fully-outsourced Credit Control ?? -Credit Control training ?? -Debtor solutions ?? -Audit & Risk analysis ?? -Funding
Credit Control
Due to lack of resources and/or time, more and more companies large and small are turning to outsourcing to remedy their credit control issues. ? Benefits of outsourcing your credit control function: Improved cash flow Reduced bank charges Improved working capital Reduction in bad debt Staff free to concentrate on core business issues Improved paper trail Continuity of service At Inksmoor, we have made a large investment in IT and Telecommunication systems which means we are able to offer our clients confidential collection facilities, as well our popular disclosed service. ? How do we do it? Outsourcing your credit control function couldn't be easier.? You simply provide us with an up to date customer list and a ledger either monthly or weekly, and we do the rest. We will recommend a course of action based on our experience in cash collection techniques, structured around your terms of trade We will be pro-active in our chasing; we contact your customers just before the invoices are due to ensure any queries are dealt with promptly. We will provide you with a weekly, bi-weekly and monthly report of our activities detailing payments that are expected.
Credit Control Training
Not everyone is comfortable asking for money.? We have found that much is expected of untrained people within a business and this can hinder productivity. ? Inksmoor introduced Credit Control Training to provide the tools, experience and confidence necessary to carry out good credit control. ? We will introduce your team to the reasons why effective credit control is needed and the potential repercussions of bad credit control on a business.? We will train your team to be effective and professional in their collection techniques. ? They will be shown that good credit control is about improving and maintaining relationships, both externally with your customers and internally with colleagues. ? The training is given at your premises, either on a one-to-one basis or small groups and generally takes one or two days to complete, dependent on the number of delegates.
Invoice Finance ? Whatever the cash flow requirement, whether it is for developing new products/services, financing an acquisition or simply raising funds required for your existing business Invoice Finance enables you to release funds tied up in your outstanding invoices, allowing these valuable funds to start to work for you.
Invoice Discounting Invoice Discounting is similar to Factoring in that you raise and issue your invoices, and funds are advanced up to an agreed pre-payment percentage to you straight away (up to 95%) and pay you the balance, less fees, on receipt from your customer.
For more information and services please visit our website inksmoor.co.uk.
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