By having a solid credit control process, you can not only safeguard your money and maintain financial stability you can also build great customer relationships through openness and flexibility.
Why credit control matters
Before we get into how to create a credit control process for your business, you might be wondering why it’s important to have one at all? Well, there are three main benefits to credit control;
- Cash flow control: a credit control process helps to ensure that your cash flow remains consistent. Understanding your business finances not only means you can cover day to day costs, but also allows you to plan for future growth.
- Reducing bad debts: By assessing your customers creditworthiness in advance you can reduce the risk of non payments and bad debt. This can be by assessing a customer’s likelihood to pay and what time frames can be expected between a product sold or service provided and the invoice being paid.
- Building great customer relationships: Having a clearly defined process for both you and your customers means you both know where you stand. It allows you to chase your payments promptly and professionally and strengthen those customer relationships.
Without a strong credit control process, you put your business at financial risk and cash flow problems.
It doesn’t take much to ensure that you keep your business safe.