As a business owner we must never forget that CASH IS KING!
That is why I consider it imperative to have in place a robust system for credit control, to ensure the business is receiving the monies owed on time.
I totally get that credit control is a prickly subject, with business owners concerned of damaging client relationships through chasing payment, however we must remember we are not a bank lending money to our clients but a business making money.
Credit control can be a lengthy and costly process, so the process I have adopted and encourage clients to follow is:
I recommend using the Know-it platform as a tool to reduce debtor days.
The platform works on 3 main principles:
- CHECK IT
- CHASE IT
- COLLECT IT
So let’s consider these principles:
CHECK IT
This principles aim is too act as a preventive measure. This section monitors company notices, Company House updates, unsecured creditors match as well as monitoring any changes in companies.
As a platform user this supplies information on your debtors such as:
– have they gone into receivership
– has a major client of theirs gone bust and owed them money
– has the company made changes at Companies House, such as lodging a charge against them.
This can be a valuable tool especially when taking on a new client and offering credit to them, and have an alert when changes or updates are made.
CHASE IT
From the platform you can set up a schedule of chasing emails or SMS messages to clients, with templates to assist in this.
The schedule I always recommend is:
- 7 DAYS BEFORE INVOICE IS DUE ( a reminder of payment becoming due)
- 7 DAYS AFTER INVOICE IS DUE
- 14 DAYS AFTER INVOICE IS DUE
- 21 DAYS AFTER INVOICE IS DUE.
Before we move onto the next principle, if you have completed this schedule and 7 days after the 21 days chase sent and no communication has been received, make that call bringing their attention to the fact if payment is not forthcoming you will have no alternative but hand over to your external debt recovery department.
COLLECT IT
What makes this platform unique is that Know -it has a commercial debt recovery partner, Darcey Quigley & Co.
So if you find that your robust credit control process has been exhausted and still not in receipt of the money, by a click of a button you can receive a quote for Darcy Quigley to collect on your behalf.
Of course this is a process we all hope we do not have to action, however if you have completed the above schedules in Chase-it and still not received the monies owed, rather than write it off, COLLECT IT!
Where can I find out more about setting up a Credit Control Process?
This is just an overview of the platform; it has many other useful features.
To set a company up on Know-it and provide initial training and ongoing support, our pricing package starts at £49.99 plus vat per month.
If you would like to know more about Know-it and how it can assist you with your cashflow, please book a discovery call to discuss further