What is credit control? How it works, who does it, and how to get it right

Credit control is the process a business uses to decide which customers can buy on credit, how much credit to give them and on what terms, and then make sure they pay on time. It starts before the first invoice, with a credit check, and runs through invoicing, payment reminders, handling queries, and escalating debts that stay unpaid. In the UK, it's usually the job of a credit controller or an accounts receivable team, and the Late Payment of Commercial Debts (Interest) Act 1998 gives you the right to charge interest and compensation when another business pays late. Done well, credit control keeps cash coming in on time without damaging the customer relationships you've worked hard to build.

What is credit control?

Whenever you deliver goods or services now and let the customer pay later, you're giving them credit. Credit control is how you manage that risk. It answers three questions: should this customer get credit at all, how much and for how long, and what happens if they don't pay when they said they would.

The ACCA career navigator describes the credit controller as the person responsible for managing a business's debts and recovering unpaid money owed by other businesses or individuals. The role also covers evaluating new credit requests, which includes checking credit ratings, deciding whether to allow credit, and advising on credit limits.

It matters because late payment is expensive. Research from the Department for Business and Trade, published in July 2025, estimates that late payments cost the UK economy almost £11 billion GBP a year and that around 14,000 businesses close each year as a result. The same research found that 15% of surveyed businesses had avoided doing business with specific customers because of how they pay. Good credit control is how you avoid becoming one of those numbers, without turning away good customers.

What credit control means in the UK

In the UK, credit control is the everyday name for this work, and any business that sells to other businesses on invoice is doing some form of it, even if nobody has the job title. Outside the UK, you'll often see the same work called credit and collections, or accounts receivable management. Whatever you call it, the aim is the same: get paid in full, on time, by customers you want to keep.

How does credit control work?

Credit control follows the life of a customer account, from the first order to the last payment. The table below shows each stage at a glance. For a step-by-step guide to each one, see the credit control process: 7 stages from onboarding to escalation.

Stages 1 and 2 prevent problems before they start. Stages 3 to 6 bring the cash in. Stage 7 is for the accounts where everything else hasn't worked.

How to check a customer's creditworthiness

Creditworthiness is how likely a customer is to pay you in full and on time. Checking it is the first job in credit control, because it's far easier to set sensible terms at the start than to recover money from a customer who could never afford them.

A good check draws on a few sources:

• A business credit report from a credit reference agency, which typically shows a credit score, filed accounts, county court judgments, and how the business pays its other suppliers.
• Companies House records for limited companies. You can get some company details for free, including the registered address, current and past officers, filed documents, and insolvency information.
• Trade references from other suppliers the customer already buys from on credit.
• Your own payment history with the customer, if they've bought from you before.

Use what you find to set a credit limit and payment terms that match the risk, then keep checking. A customer who paid well last year can run into trouble this year, so review limits regularly and watch for warning signs such as slower payments or new court judgments. For a step-by-step method, see how to run a credit check on a customer and how to set credit limits for B2B customers.

If you'd rather not pull reports one by one, credit checking in Chaser lets you pull credit reports and scores on existing and prospective customers, and set up alerts when a customer's credit risk changes, from the same place you manage your receivables.

What does a credit controller do?

A credit controller makes sure the business gets paid for what it sells on credit. The role is also called an accounts receivable specialist. According to the National Careers Service, day-to-day tasks can include:

• checking customer credit ratings and setting up credit accounts;
• speaking with customers to organize repayments;
• starting legal proceedings if debts are not paid within an agreed time;
• processing payments and keeping customer records up to date;
• producing credit reports for management.

In practice, a typical day mixes routine and judgment: reviewing the aged debt report, sending and following up reminders, calling customers about overdue invoices, resolving queries with sales or operations, allocating payments, and deciding which accounts need to escalate.

Skills and qualifications

You don't always need a formal qualification to become a credit controller. The National Careers Service says many companies will train you on the job, and that most employers expect 3 to 5 GCSEs at grades 9 to 4, including maths, the ability to use spreadsheets and accounting packages, and experience of office administration or customer service. Apprenticeships are another route, including the Credit Controller and Collector Level 2 and the Credit Controller and Debt Collection Specialist Level 3 apprenticeships. The Chartered Institute of Credit Management (CICM) offers professional courses at different levels.

The skills that matter most are persistence, patience, attention to detail, and clear, calm communication, because the job involves difficult conversations with customers you still want to keep.

How much do credit controllers earn?

The National Careers Service gives an average salary of £21,000 GBP a year for a starter, rising to £32,000 GBP for an experienced credit controller, with typical hours of 37 to 40 a week. Pay varies by region, sector, and seniority. With experience and professional qualifications, the National Careers Service says you could go on to become a credit manager.

Credit control vs credit management

The two terms are often used as if they mean the same thing, but there's a useful difference:

• Credit management is the strategy. It sets your credit policy: how much risk the business will take, which customers qualify for credit, standard payment terms, and when debts are written off.
• Credit control is the day-to-day work that puts that policy into practice: checking customers, invoicing, chasing, and escalating.
• Debt collection is the final stage, recovering money that is already seriously overdue, often through a specialist agency or the courts.

In a small business, one person may do all three. In a larger one, a credit manager owns the policy and a team of credit controllers runs the process. For more on where the lines fall, read the difference between credit management and debt collection. If you don't have a written policy yet, start with this credit control and debt collection policy template.

In-house, outsourced, or automated credit control: which suits you?

There are three ways to run credit control, and you can combine them. The right choice depends on how many invoices you send, how complex your customers are, and how much of your team's time chasing takes up today.

The line between these options is blurring. Chaser Care, for example, gives you a dedicated accounts receivable specialist who chases customers, handles initial disputes and queries, and reconciles payments in your brand's tone, working in Chaser's software so you can see every conversation. If you're weighing up the outsourced route, this guide to whether outsourced credit control is worth it walks through the comparison in more detail.

The UK rules every credit controller should know

If you sell to other businesses in the UK, the Late Payment of Commercial Debts (Interest) Act 1998 gives you rights when a customer pays late, even if your contract doesn't mention them. The Act covers contracts where both you and your customer are acting in the course of a business. It doesn't cover sales to consumers.

• When a payment is late. According to GOV.UK, if you agree a payment date it must usually be within 30 days for public authorities or 60 days for business transactions. You can agree a longer period between businesses, but it must be fair to both sides. If you don't agree a date, the payment is late 30 days after the customer gets the invoice or you deliver the goods or service, whichever is later.
• Statutory interest. You can charge 8% plus the Bank of England base rate, as simple interest. The base rate you use is the one in force on 30 June or 31 December before the debt became overdue, under the rate order. The base rate was 3.75% on both dates, so statutory interest is 11.75% a year on debts that became overdue in 2026. You can't claim statutory interest if your contract sets a different rate.
• Fixed compensation. You can also claim a fixed sum of £40 GBP for a debt under £1,000, £70 GBP for a debt of £1,000 to £9,999.99, or £100 GBP for a debt of £10,000 or more, plus reasonable recovery costs above that sum.

For how to set, word, and apply late fees in practice, see how to apply late payment fees to overdue invoices.

The rules are changing. The Commercial Payments Bill, introduced in the House of Lords in May 2026, proposes maximum payment terms of 60 days with strictly limited exemptions, mandatory interest on late payments at 8% above base rate, and stronger powers for the Small Business Commissioner. As of 3 October 2026 it isn't law yet: its third reading in the House of Lords is scheduled for 20 October 2026, and it still has to pass the House of Commons.

If a debt still isn't paid, the usual next steps are a formal demand letter, then a collection agency or a court claim. In England and Wales you can apply to a county court online or by post. Scotland and Northern Ireland have their own processes.

How do you measure credit control?

You can't improve what you don't measure. These are the numbers worth reviewing every month:

DSO is the place to start. The formula is: accounts receivable ÷ total credit sales × number of days in the period. If you're owed £300,000 GBP at the end of a quarter in which you made £900,000 GBP of credit sales, your DSO for those 90 days is £300,000 ÷ £900,000 × 90 = 30 days. Compare it with your standard payment terms: if your terms are 30 days and your DSO is 45, customers are paying about two weeks late on average. For formulas and targets for each measure, see the accounts receivable KPIs to track.

How to get credit control right

Strong credit control comes down to a few habits, applied every time:

1. Write it down. A short credit policy tells everyone who gets credit, on what terms, and when an account escalates. It also makes your decisions easier to defend.
2. Check before you extend credit. Run a credit check on every new business customer and review limits for existing ones.
3. Agree terms up front. Put your payment terms and late payment rights in the contract, and repeat them on every invoice.
4. Invoice fast and accurately. A missing purchase order number or a wrong amount gives a customer a reason to put your invoice to one side.
5. Remind before the due date, not just after. A friendly reminder a few days early catches problems while there's still time to fix them.
6. Make it easy to pay. A payment portal link in your reminders lets customers see what they owe and pay straight away, without searching for your bank details.
7. Escalate on a schedule. Decide in advance when a call replaces an email, when you add interest, and when an account moves to collections.

Most of these habits are repetitive, which is exactly why they slip when your team is busy. Credit control software such as Chaser connects to your accounting system, sends personalized reminders by email, SMS, and letter on the schedule you set, gives customers a payment portal, and shows you who owes what and who is paying late. Your team keeps control of the customer conversations that need a person.

This article is general guidance for businesses, not legal advice. Your rights depend on your contract, your customer, and where you trade. For advice on a specific debt, speak to a qualified solicitor.

FAQs

UK figures checked against legislation.gov.uk, GOV.UK, the National Careers Service, and the Bank of England on 3 October 2026. The statutory interest rate changes each 1 January and 1 July if the base rate has moved. Last reviewed 3 October 2026.