2 Fatal Mistakes Small Businesses Make with Credit Control
Critical Business Processes
Credit Control for Small Businesses
I have penned substantially in the past regarding different business processes that will allow a small company raise margins and maximize earnings, most of these have included some variety of outsourcing as the key idea, however today I would like to discuss a process that for a lot of small business owners is dealt with internally. Credit Control is the beast involved and if handled incorrectly could ruin a company as fast as a swarm of locusts will get rid of a field of crops. Although it could be outsourced, practical experience shows us that very few small business owners are happy to hand this to another business to take care of.
Aggressive Credit Control
This might do more harm than good, do not get me wrong here, we are referring to the control process rather than debt management, we are talking about having your clients to pay you in a timely manner and to never neglect your invoice. based on whether you deal with businesses or the public will identify what is too aggressive a policy, for instance if you are supplying companies where the payment terms are normally thirty days or even more, it is perfectly appropriate and common to deliver a prompt that the settlement date is almost here, this serves to remind the customer that you are proactive with your credit control and if they are about to withhold payments from somebody (usually to eliminate their own short-term income problem) hopefully it will not be you. If you are dealing with the public it might not be sensible as to do this might alienate them and have them upset and likely to make you wait for payment. It is reality that should a consumer take umbrage to an aggressive request for money they can take out their aggravation on the business by denying settlement until the final possible second just avoiding costs but creating you maximum stress and concern and cost in the meantime. Getting it right is an skill as the last thing you need is to convert your clients away from you for recurring buys but at the same time you want your company and your invoice to remain at the forefront of their minds.
Credit Control on Amazon
Passive Credit Control
Not being aggressive enough is almost as bad as being too aggressive, although it will not result in the same sort of backlash it is just as likely to result in non payment
If you want your business to go bankrupt there is a sure fire method, sell loads of product or your service but never ask for payment, it is pretty much guaranteed the quickest way to bankruptcy. Most businesses and individuals will wait to be chased before paying, of course there are a few who will pay you, however, in general most other business customers and to a lesser degree individuals will hold payment for as long as they can get away with it.
Puzzled By Credit Control?
Credit Control Software
- Credit Control Software | Query Management - Safe Credit Control
Safe Credit Control software enables your credit control department to monitor collections management, increase cash flow, reduce debtor days and speed up query management.
Is Credit Control Software the Answer?
Getting it right can be difficult but with the aid of credit control software and various other options it can be achieved and you can reach that nirvana state of having happy clients and regular reliable cash flow.
Look out for my related hub that discusses the credit control options for the smaller businesses and the role that credit management can assist in making your credit control simpler.
Credit Control Outsourcing
- Payroll Outsourcing Services | Back Office Outsourced Solutions - Safe Outsourcing
Safe Outsourcing offer payroll outsourcing and back office outsourcing solutions for financial management personnel. For Payroll and Invoicing solutions, outsourced payroll solutions or a back office solution then Safe Outsourcing can service your ne
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