Credit control – that’s a subject that should be dear to everyone’s heart.

Even in these difficult times it often isn’t given the time or effort it deserves.

At present we are providing an interim general management service to a specialist company in the festivals and events sector and credit control is part of the brief so on the phone we get to sweet talk some improved cashflow for our client.

It’s been said before but bears saying again – making the effort to establish some rapport with your debtors is really worthwhile.

Once on first name terms it does become easier to keep calling and make sure your invoice is put at the top of the pile. Most businesses have cashflow issues at the moment so take the time to get your invoices paid as quickly as possible.

Late payers – for whatever reason – can become a real problem and just a few reluctant payers can easily lead to cashflow difficulties.

We always take a pro-active, very personal approach, state the case clearly and try and make it easy for the client or customer to want to pay.

Be prepared to negotiate a win-win result by spreading payments or possibly offering a discount, but be consistent and persistent and make them realise that you will keep ringing – every day in very difficult cases – until you gain agreement to pay. Then keep in touch to make sure they do pay!

Cash by Adam Hawkins http://anodizeproductions.com

Articles about boosting cash flow are in every business magazine at the moment.

These articles by the great and the good – or more likely a magazine hack quoting a wide variety of semi-well known business owners – seem to be getting longer and longer. One I saw recently offered 27 ways to ease cashflow and all the suggestions were useful, BUT in essence you only need three rules:

The three basic rules for boosting cashflow:

1. Invoice as soon as possible

1. Have an effective system of credit control

1. Make cashflow management a priority

Within those rules are a multitude of issues that can be addressed to help ease cashflow and indeed actually increase the flow of cash within the business, but unless you are following the basic advice the chances are that all the rest will be wasted.

What’s your favourite cashflow tip?

One of the essential activities of a healthy business is good credit control. The old business saying is: “Turnover for Vanity, Profit for Sanity” but the last line: “Cash is Reality” is probably the most important, so here are some ideas on credit control and collection strategies. Most of these may seem like common sense but we are always surprised about how few of these suggestions are actually put into practice. Adopting a co-ordinated strategy can often bring about a swift and significant improvement.

Six quick tips to improve cashflow:
1. Appoint one person to be responsible for debt collection – make it a priority within their role.
2. Credit check new customers and set credit limits, stick to them.
3. Make it clear when invoices are due for payment.
4. Send invoices promptly as soon as work is completed.
5. Send reminders when payment is due and again a week later.
6. Make sure the paperwork is supported by a call and ensure you get agreement on a course of action. Always follow-up.

If that doesn’t work and you get into a position of having to recover debts, here’s some help:

Six point debt recovery strategy:
Have a plan for recovering late payments – especially from regular offenders
1. Send regular statements.
2. Call to confirm the due date and that a payment will be made on schedule.
3. Establish a one-to-one relationship with whoever is responsible for arranging payment/drawing the cheque/authorizing the cheque run.
4. If you can’t get a commitment to pay, make it clear when you will call again. Don’t be put off by excuses, get agreement to a course of action. Make sure you call on schedule.
5. If all else fails, send a 7 day letter with a copy of the invoice, making it clear what action will follow if they do not pay within 7 days. Never make idle threats.
6. If all else fails, Instigate a claim through the County Court. The procedures are not too difficult and you do not need a solicitor.

Often the issue of ‘official’ documents from the court will be enough to guarantee payment. Few credible businesses wish to gain a bad credit rating following a County Court Judgment.

Using the personal touch is perhaps the most important part of any credit control regime. Make sure that when you call, the debtor already knows who you are, which business you represent and why you are calling. Creating a one-to-one relationship with the person responsible makes it easier to put your case strongly. If a company is struggling to make payments you need to make sure yours is at the top of the list!

We’ve got a great track record of helping companies to become more profitable but finding out if a consultant suits you can sometimes be a costly business so we’ve found a source of funding that may mean you don’t have to risk your own money on finding out how good we are.

If you’d like to see if we can help you to make more profits just give me a call on 01480 830282.