Credit Control is a key part of any cash management strategy. Previously, I have discussed how you need to keep on top of your debtors to ensure you get paid for the work you have done. Good credit control, however, should start much earlier in the business process right at the beginning before you decide to carry out the work or supply the service.
Surely, the purpose of supplying goods or services in any business is to make a profit and get paid! If you ask these questions before you start, this could avoid a lot of problems further down the line.
- Can the potential customer afford to pay?
- Do they have a good track record of making payments on time?
- If the answer to any of these questions is no, then you should be asking yourself do you want to work with them?
Recently there have been a range of new pieces of software that can help businesses to manage their credit control more effectively. One free piece of software on the market is Satago, this offers a range of core credit control features but also has some useful extras. One of them being free Credit Safe Reports, which give a credit report and rating for incorporated business. The software accesses the risk of potential customers, monitors those credit limits and notifies you of any changes to their rating. This is free and comes with the package as standard.
Using the credit checking function in Satago you can get the information you need to make a properly informed decision about taking on new pieces of work or new customers. This should give you a head start in the credit control process, helping you to avoid those customers who are unlikely to pay you on time or at all. It also keeps you up-to-date with any changes to existing customers credit status so you can reassess your customers credit worthiness before undertaking any new work.
Should you need further information on any of the above please contact a member of the team on 0114 2671617 or email tim.baum-dixon@shorts.uk.com
Alicia Williams
Alicia is Director of the Genus team at Shorts, a chartered certified accountant and Xero specialist.
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