Credit control is much like a juggling act.
Yes, it is a necessary undertaking that can cost a business when not done professionally, but it’s also a headache and a challenge to stay on top of.
Often businesses are already stretched, and expertise is lacking in this area, which is why outsourcing credit control to a reputable agency is now commonplace.
What is credit control?
Credit control includes the process of deciding who you will give credit to, as well as the way in which you get paid for this credit – debt collection. However, when done poorly, businesses are left with customers who avoid paying on time – or at all – leaving you with a cash flow problem. There’s also the trick of having to keep good relations with customers while simultaneously hounding them for outstanding amounts. This is often best performed by an outsourced credit control agency.
What are the signs you need to outsource credit control?
If you look closely enough, you’re likely to find warning signs that need your attention. We’d like to encourage you to run through these tell-tale signs and ask yourself honestly if some of these ring true for your business. Perhaps your credit control measures need a helping hand?
1. Your systems aren’t keeping up
If you’re still relying on a manual system for credit control operations, then that’s the first sign you desperately need to outsource your operations. Modern credit platforms allow for automated operations that use streamlining features to make invoicing so much more efficient. If you’ve automated but are using an outdated system, you’re likely avoiding the cost of upgrades, but you’re not benefitting from the latest in credit control software.
Instead of spending money on software upgrades or extra staff to work with them, re-direct these funds to a credit control agency that can take care of all your operations. In addition to this, you’ll have access to this platform, allowing you to review how your accounts are being managed.
2. There’s inconsistency in your credit process
Does your company have terms and conditions related to late or non-payments? If not, this is a sign you need to outsource credit control operations. However, even if you do have terms and conditions, if these aren’t being properly enforced every time, then you’re also in need of help.
There should be constant monitoring of payments, as well as reminders scheduled for those who haven’t paid. This not only ensures all payments are being made but encourages prompt payments moving forward. Customers are more likely to make payments on time when they understand the repercussions.
3. Late payments are becoming the norm
Customers that consistently pay late is nothing new.
But, the impact is not fun for anyone. Small to medium enterprises are particularly vulnerable when late payments become the norm. If you’ve noticed this trend emerging in your business, then now is the time to combat such tardiness with an outsourced credit control agency. In addition to monitoring late payments, a team of professionals will implement the processes outlined to assure payment quicker than you can. Polite persistence is key to prompt payments.
4. You’re simply writing off debt
Taking it a step further, if late payments have become the norm, you might find that writing off debt is easier than chasing up certain accounts. This is a bad sign.
Understandably, you don’t want to alienate customers with court cases and debt collection, but this can be avoided by following proper procedure from the start. An outsourced credit control agency will jump on late payments before it gets to the point of costly court cases.
5. You’re often invoicing late
Sometimes late payments are simply a result of your invoicing too late. Companies that consistently invoice late are setting the precedent for customers to pay late. By outsourcing credit control, you’re implementing a much more consistent approach with systematic daily, weekly or monthly invoicing. When your daily duties demand all your time and credit control starts to get beyond your control, it’s a sign it’s time to outsource.
6. You don’t send follow-ups or reminders
Once you’ve invoiced your customers, the payment has to be monitored to ensure deadlines aren’t missed. As soon as they are, reminder emails or SMSs need to be sent so that customers are assisted in making payments. Often it is just a case of the customer having forgotten or a broken payment that didn’t make it through. If you aren’t at the point of sending reminders, then you’re in need of assistance.
7. More and more time is spent on credit control
It’s understood that SMEs spend around two hours a day chasing up late payments. This is already too much time being taken away from your business and costs you in the long run. If you’re spending around this amount of time – or more – simply on credit control, then you’re wasting your time. Avoid the time and hassle by outsourcing to an agency.
8. Your team doesn’t have someone dedicated to credit control
Another common problem for smaller enterprises is that you don’t have an accounts receivable team tasked with credit control. However, at the very least you should have one individual who takes on the role of credit controller alongside other responsibilities. The problem with this is that the person is likely not an expert in the field of credit control. In addition, they are often too busy to dedicate sufficient time to the job. Rather ease the burden on your team by hiring experts to do the job.
9. Insufficient experience and training
At one time, businesses could operate as a one-man team, performing all the tasks while keeping operations running smoothly. Modern business, with access to so much affordable technology, is very different and customers expect a much more professional approach.
Ideally, you need an experienced professional who can manage the job and embark on constant training to upskill. Perhaps your company doesn’t require a full-time individual. Perhaps you don’t have the extra resources for training. Whatever the setback, outsourcing takes this problem out of your hands. An agency consists of a dedicated team of experienced individuals working with the latest technology and techniques.
10. Your credit control is hampering growth
A trend that often emerges in small-to-medium enterprises is that, as their business grows, they’re suddenly unable to perform the administrative tasks they could in the early stages. There are only so many hats one can wear before things start going awry.
This is often a sign it’s time to outsource. The reason being that your business is growing steadily but the administrative tasks are growing too. If you direct time and resources to admin rather than the growth side, your business will eventually stagnate. Let a team deal with the task of credit control so that you can deal with accelerating business.
11. Customer relations are being impacted
This is one of the biggest balancing acts for businesses – keeping customers happy while still pursuing outstanding payments. Despite years of building up relations, poor invoicing and communication can drastically break this down and prevent repeat business.
When you outsource to a credit control company, your customers will be dealing with an experienced professional who has training in maintaining customer relations. A third party also provides that business buffer so that you’re getting your money without damaging relations.
How outsourcing credit control will change your business
If the aforementioned signs are reflective of your business, then it’s definitely worth considering outsourcing to a reputable credit control organisation like Chaser.
Here are some of the benefits you can look forward to.
- Improved cash flow: Payments secured quickly result in a healthy cash flow that ensures smoother business operations.
- Save money: You’re not having to pay the salary of an in-house credit controller or risk the time wasted on credit control yourself. This converts to significant cost savings in the long run.
- Professionals: You have access to a team of professionals at all times, improving your brand and getting your money quickly.
- State-of-the-art software: Credit control agencies will rely on the best credit control software which can be integrated with your system.
- Less stress: When the hassle of securing payments is out of your hands, the stress will reduce significantly! This frees you up to focus on business-enhancing operations.
Ease your financial and business stress today by contacting Chaser to find out more about their impactful credit control system.
