You may be familiar of how bothersome it can be to collect unpaid bills if you run your own business, and it might take a lot of time and interfere with other important tasks for small businesses with limited resources.
In order to save time, develop stronger connections with your customers, and have a better grasp of cash flow, good credit control is crucial. You can strengthen your credit control in a number of ways, including establishing clear deadlines and sending accurate invoices.
Here are some reasons why having good credit control processes is important for your business:
Helps Time Management
Due to how time-consuming it can be to chase outstanding bills, good credit control is one of the reasons so many businesses prioritise it. You and your team might be wasting a lot of time that could be used more effectively if you and your workers didn’t have to communicate with your debtors to seek payment, send reminders on a regular basis, and complete the debt collection process. An established credit control process may save this time loss.
Ineffective credit management might cause you to repeatedly chase your clients for payment, straining your relationship and even affecting how you collaborate in the future. By assigning clear payment due dates and implementing deadlines, you can ensure that your customers are aware of what to expect and that communication is improved.
Mitigate Cash Flow Issues
Cash flow issues for your company might arise quickly if you have a long list of debtors from whom you are still waiting payment. Unpaid invoices might throw off your initial plans if you’ve made a cash flow projection and force you to cut spending in other areas in order to pay your operating costs.
Ways to better manage your credit control:
By establishing precise deadlines with each customer, it is feasible to steer clear of any credit control issues before they arise. By sending out invoices like clockwork, your customers should realise that these payment deadlines are strict and must be met. By doing this you won’t have to keep chasing payments, which helps avoid damaging your relationship with clients.
In order to prevent a reoccurring situation, you should also keep track of any customers that routinely make late payments and impose additional effort to follow up with them.
Our experts at AIT Accountants can help if you’d like to manage your company’s cash flow more effectively. Get in touch with us at firstname.lastname@example.org