4 trading weeks til Christmas – take control of your Credit Management now!
At this time of the year it is important to ensure all monies that are owed to you are received on time. December is known to be a short trading month so make the most of the days you do have by following some of our tips below:
Day 1: Review your current performance
The first step to being in control of your credit control is to look at what you already do on a daily basis.
- And take measurements. E.g.
- Debtor days
- % 90 days = outstanding to whole ledger
- Disputes by reason, volume & value
Review your current performance by asking yourself what is working and what requires attention.
Anything you spot that might need addressing highlight the issue and be ready to action it in day 2.
https://www.cmgroupuk.com/news-and-advice/why-credit-controllers-need-to-be-vigilant/
Day 2: Start Updating your current processes
If your review identified that your invoicing is an issue, you should review your invoicing process and ensure you are identifying any of the below:
- Sending back up with the invoice such as proof of delivery or time sheet
- Being fully aware of each customer’s invoicing requirements,
- Do they require a hard copy by post?
- Do you need a PO before the invoice will be paid?
- is the po out of value or time
If you need some help with the above we have factsheets available.
Day 3: Review your sales ledger
Your sales ledger should provide you with the information you need to review your business performance and should regularly be reviewed.
If you haven’t done this recently take the time to do so now.
- Look at oldest invoices first and establish the reason for non payment. Resolve any disputes quickly.
- If chasing older invoices is to the detriment of newer items on your sales ledger, it could be more beneficial to seek external help.
We offer a outsourcing service that may prove beneficial for you.
Day 4: Evaluate your customers
After reviewing your sales ledger you may have revealed some customers who are persistently poor payers.
- If you performed a credit check on your customers when you first started work with them it would be a good idea to run this check again.
- Make this something you do on a regular basis
Using the information in the latest check can help you to make decisions about how to chase anything outstanding as well as providing a new limit in the future.
Day 5: Protect against late payment
With late payment showing no signs of disappearing anytime soon it’s wise that you have plans in place in order to protect your cash flow should you be paid late or not at all.
This could be to build a cash reserve to cover any cash flow gaps or secure a funding facility that you can rely on to keep you going whilst you wait for payment.
We are experts in Outsourced Credit Management as well as providing advice for quick wins that you can implement NOW.
Why not get in touch today and see if we can help to ensure you have a much more profitable 2020.
