Credit Control

4. Everyday Credit Control

4.1 Invoice promptly. The sooner you invoice, the sooner the payment is due.

4.2 Call the customer to confirm each delivery has arrived and that no goods were missing or damaged. Confirm the payment details.

4.3 Keep unpaid sales invoices in date order, so you can see at a glance which ones are the oldest.

4.4 Set aside a regular time each week to chase outstanding invoices, focusing on:

• The largest debts, followed by the oldest.
• Customers you guess may have problems.

4.5 If a customer exceeds your credit limit, insist the excess is paid before accepting any more credit orders.

4.6 If a customer has not bought from you for six months, or orders fall below your minimum, find out why.

• Is the company going bust? If so, try to get any money you are owed as soon as possible.

4.7 Every month check the total credit outstanding across your whole business.

• How many days' sales does this represent? For example, in a business with sales of £1,000 a day (annual sales of £365,000), total credit outstanding of £44,000 represents 44 days' sales.
• If the days' sales figure rises, you are being paid more slowly. Investigate and correct the problem.

4.8 In a seasonal business you may be unable to chase debts during your busy period.

• Consider making use of a debt collection agency or a specialist solicitor.