6 Tips for Effective Credit Control

Being a business owner comes with many challenges, especially when it concerns money.

You have to have enough money to run the business and pay yourself and your employees which means you have to price your products/services correctly. Then, the biggest monetary challenge that most owners have is credit control. Also known as, getting invoices paid on time!

Many businesses operate not knowing what their month-end payments will be, but this is not sustainable. After all, you can only run out of money once.

In this article, we give you 6 credit control tips so you can get paid on time AND build a consistent cash flow...

Tip #1 – Write a ‘Credit Control Policy' document and use it Create a formal company policy document for your credit control procedure and help your staff follow this process. Over time, your credit control procedure will be a robust, repeatable working practice.

Tip #2 – Perform regular credit checks The time spent performing regular credit checks on your clients will save you so much time wasted on chasing late payments later if you offer credit to those who cannot or will not pay. Perform these financial status checks and you can make better, informed decisions about whether or not to trade on credit terms.

Tip #3 – Automate your invoicing process Creating invoices, sending invoices and chasing invoices all take time, so automate this process. Streamlining this process not only helps with your efficiency but also increases the likelihood that invoices will be paid on time and within agreed terms too.

Read more in the magazine (page 57)

Penney's Accountancy Ltd, based in Farnborough, Hampshire

www.penneysaccountancy.co.uk

admin@penneysaccountancy.co.uk