Cash flow is the lifeblood of any business. Without it, you can’t pay your staff, suppliers, or yourself. Yet many businesses struggle with collecting what they’re owed from clients on time. If you want your company to thrive, you need air-tight credit control. Watch my video or read below to find out more.
What Is Credit Control?
Credit control is the process of collecting all payments within your set payment terms. The standard payment window is usually 30 days from the invoice date, but this can vary. Before doing anything, understand what payment terms you offer to your clients. Then, aim to have everyone pay on time or early per those terms.
With cloud accounting platforms like Xero and QuickBooks, you can easily view accounts receivable to track unpaid invoices. However, data must be 100% up-to-date before chasing customers. Reconcile with bank transactions regularly to confirm payments made. Nothing torpedoes client relationships faster than hassling them for money they’ve already paid!
Why You Need Solid Credit Control
Review accounts receivable at least monthly. Look at who’s over 30, 60, 90 days late. This money is owed to you but sitting in clients’ accounts, often helping their cash flow while hurting yours. Don’t let invoices sink to the bottom of the pile. The squeaky wheel gets paid first, so proactively follow up on past-due amounts.
Poor credit control directly impacts your ability to operate. If you’re not collecting from clients on time…
- You can’t pay staff salaries on schedule
- Suppliers may cut you off by restricting inventory
- Your own accounts, like loans or credit cards, go unpaid
- You struggle to reinvest and grow the business
Ultimately, bad cash flow stemming from weak collections can put you out of business, regardless of sales or profits on paper. Tight credit control and collections procedures can literally make or break your company’s survival.
With consistent credit control procedures, customers will learn to pay promptly. You’ll spend less time chasing payments, write off less bad debt, and free up precious operating cash flow.
For example, one client improved receivables by £55,000 simply by invoicing upfront rather than extending 30-60-day terms. That’s £55,000 more available for payroll, supplies, inventory, and avoiding maxing their overdraft each month!
Better Cash Flow Awaits!
Healthy cash flow is possible for your business with diligent credit control. If you need help setting up or improving collections, I’m happy to assist! Contact me to schedule a free consultation. I can share credit control systems that have worked for other clients to help you get paid faster.
Click the link below and book a free consultation.
