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Many organizations provide their clients with credit facilities to increase the sales of their products or service. However, if the organizations extend credit facilities to their customers, they also need credit control.
Credit control is essentially monitoring the clients' credit account and sending period reminders regarding any outstanding dues. It's an effective way for organizations to provide credit facilities to only those that pay them back on time!
A credit controller is an individual that's responsible for managing all the debts of an organization. It's the responsibility of the credit controller to uncover any unpaid money that a client owes the organization. These clients can include both businesses (commercial collection) and individuals (consumer collection).
On top of that, credit controllers need to also review the organizations' debt recovery procedures. Their responsibilities include assessing a client's case and deciding when they should stop supplying goods and start with legal proceedings. In the worst-case scenario, a credit controller will need to negotiate with a bankrupt business to recover funds.
Here are few things that all credit controllers should do to improve their practice!
Any decent credit controller will continue to recognize the importance of learning and will discover innovative new techniques to improve their work. Not only does this make life easier for the credit controller in the long run, but it'll also help boost their business performance.
Employing the latest techniques and new methods will improve the efficiency at which the credit controller collects funds. One way to improve efficiency and save time for a credit controller could be to use an accounts receivable automation software such as Chaser. With Chaser, you can create personalised templates and schedules that are sent out automatically when an invoice gets overdue. Each payment reminder can be personalised with your tone of voice and signature so that it looks like it has been hand-typed by yourself. As a result, by not sending each email manually you can save hours every week, and on average, Chaser users do save up to 15 hours per week on credit control activity - time you could spend doing other important work.
One of the most essential qualities for a credit controller is being resilient in the face of mistakes. Everyone makes mistakes, but a good credit controller will accept their mistakes and learn to get back up stronger than ever before. The ability to get back up stronger has a more positive impact than being frightened.
Credit control is a job that involves some inevitable setbacks. If the credit controller isn't capable of dealing with setbacks, they will struggle significantly. It's a role that requires individuals to have confidence and remain persistent in the face of any struggles.
A key metric that all businesses need to keep an eye on for their survival is cash flow. Maintaining a cash flow forecast can give individuals an indication of what can happen down the line. In addition, an accurate cash flow forecast can help the credit controller identify potential issues before they arise.
That way, the credit controller can help improve the cash flow forecast by informing the forecasters about clients that are making payment delays. Their input will help make forecasting more accurate and gives management the ability to adapt their strategy to reflect cash flow turbulence.
A credit controller that underestimates the overall importance of cash flow will put the business in a position where they're unable to avoid hitting gaps in cash flow.
A credit controller needs to understand the importance of building relationships. The most important relationship for a credit controller is the one they have with their business's customers. Developing a good understanding with the customers who are going to pay you can help the organization get their payments on time.
Always having good manners and displaying confidence is the best way to get through to customers. A bad credit controller is one that places too much focus on getting paid and not caring about what the customers think about their method.
While the end goal for any credit controller is to focus on getting customers to pay, it's also important to think about the way they conduct themselves. At the end of the day, securing payment is the ultimate responsibility, but credit controllers should always keep an eye on how they conduct themselves.
One way to preserve and build customer relationships is to send thank you for paying emails when your clients pay an invoice, both when they are overdue, but also if they pay before the due date. This will help build relationships, and act as a kind gesture as well as encourage your clients to pay. With Chaser, thank you for paying emails are sent automatically when an invoice has been paid, so no need for you to remember to do it yourself!
Any credit controller needs to have an acute understanding of their own strengths and weaknesses to get the most out of their performance. Some cases are very time-sensitive, and that's where the credit controller needs to know how to pull the trigger.
Instead of spending too much time trying to figure out things on their own, the ability to know when to ask for help isn't a weakness. It's a strength.
A good credit controller knows when to ask for assistance from other people. If the credit controller fails to ask for help and delays collection, the organization will have to pay the brunt of the losses. All of this responsibility makes the credit controller an essential role for any organization.
Even though most organizations tend to hire a credit controller, they also have their own credit policy. Regardless of the situation, it's the duty of the credit controller to always stick to the company's credit policy.
Following the credit control policy helps ensure that the credit controller always follows a structure and conduct on the basis of what the company believes is best!
If you don’t have a credit control policy, or if you’re looking to optimise and improve your current one read then this article is exactly what you need. The Credit Control and Debt Collection policy template for businesses outline how you create an effective credit control policy and includes a template you can use for your business.
Regardless of whether the customer is old or completely new, the credit controller should perform a credit check before agreeing to any trade. Conducting a credit check will allow the controller to assess whether or not the client can pay the company back.
It's also important to focus on older customers as well. A customer's credit history can change significantly over time. By assessing the credit history periodically, credit controllers can avoid running into any unpleasant situations with older customers.
By embodying these tips, credit controllers can ensure they perform their role to the best of their ability. With so many organizations offering credit facilities to their customers to increase sales, it's an essential role for the company. Any errors can lead to a wide array of consequences, and that's why it's important to follow established protocols to avoid any issues!