Outsourcing your credit control to the Professionals
In this blog after speaking to our Credit Control department, who run a white labelled credit control service for some of our clients. We put together their view on the process and advise on how to improve your credit control.
Credit control the cogs of business
It’s no secret that credit control is necessary to keep the cogs of your business turning. Contrary to belief, outstanding invoices are not always down to clients purposely not paying on time. While yes, the inability of some customers promptly paying businesses what they owe has led to 50% of small firms experiencing negative cash flow, there are sometimes legitimate reasons as to why invoices remain outstanding.
You have the wrong contact
Usually, you’ll hold a working relationship with the person you initially set up the account, and not the person in charge of finances. Be that a procurement team, operations, or anyone else within the organisation. Chances are, when it comes to raising the invoice, it hits an already overloaded inbox and is disregarded as it has nothing to do with the recipient. You could try and rely on them forwarding it on, but it’s not an effective strategy. Instead, it pays off to take the time to understand the payment process within the organisation. Better yet, if you partner with Daniel Silverman, we can investigate the company structure to ensure we are speaking to the right people to get your invoice(s) approved for payment.
There is a dispute on the invoice
Most companies don’t chase an invoice until it becomes overdue, and at this point, they are at a loss as to the best course of action to take. When they finally get hold of the correct contact, they may then find that there is a dispute with the invoice, which pushes the payment date back even further. The longer invoices go unpaid, the more risk there is to your cash flow. It only takes one or two overdue invoices to put you in a position where you cannot pay your own suppliers, a costly issue that can put your business into administration.
Your company bills in one go, not per project.
For larger businesses with various moving parts, billing across departments in one go can cause a plethora of issues. There may be a dispute of a certain element or value and because of this the entire invoice may stall or might be under question before payment. A smarter approach maybe advising them to pay the undisputed part of the invoice, then we can look to resolve this disputed element after that, giving you the peace of mind that your cash flow is topped up as planned. This is one of many tactical approaches that Daniels Silverman can bring to assist your company finances. Working with you and your customers without the burden of spending all your time chasing, when you could be focusing on your business.
How can you improve your credit control?
The more customers you have, the more risk there is for late payments. As a result, SME’s across the UK are missing a total of more than £21 billion. We need to stop this culture of late payments that are plaguing the UK by improving your credit control. By outsourcing your credit control, you can ensure your invoices are made on time.
The key benefits of having a credit control team.
Excellent credit control safeguards your company’s cash control. It keeps the profits rolling in, so you are free to expand your business. You won’t have to worry whether you’ve got enough money to pay the people you need to pay. If credit-control goes wrong, it can lead you into debt, or worse, complete shutdown.
How do we stop this from happening?
We stay on top of your payments from day one, ensuring nothing goes awry. When you don’t have a smooth running dedicated credit control team, you inevitably have to chase invoices when they’re due. It’s at this point you are at risk of falling behind.
Setting appropriate credit limits
We also work with you to set appropriate credit limits for your customers. Lending too much to the wrong customers will destroy your cash flow. You are not a bank. You can’t work solely in high credit limits. Not getting money in, means you can’t pay money out to buy your resources and pay staff. To stop this potential issue becoming a reality, we’ll appropriately minimise your credit limit, adjusting when appropriate to trustworthy clients.
Running a business while dealing with difficult clients isn’t always the most joyous task. Keeping your understandable frustrations undercover while chasing money from your customers can be challenging, especially when these people are threatening everything you’ve worked for. We help by working on your behalf to collect customer payments, without giving the impression that the case has gone to a third party. It’s a misconception that the help of an external agency automatically means threatening letters and legal action. On the contrary. We appreciate how delicate working relationships can be and work respectfully to maintain relationships between you and your customers.
If I choose to partner with Daniel Silverman, what happens next?
When we partner with you, the first thing we will do is understand your payment process and investigate the companies you’re working with to ensure, first and foremost, that we are dealing with the correct contact. Initially, on day one of an invoice being raised, we’ll make contact with your customers to confirm receipt. We will check your company has given no reason for them not to pay, which is always unlikely. Then we check when they plan to pay you, and we follow up with emails and phone calls. We would do our absolute best to prevent late payment of invoices by being proactive from the date of issue. If necessary, further action will be taken, but we do everything in our power to avoid further proceedings. As we chase invoices individually, we can minimise the risk of mass disputes clogging up your cash flow.
Hiring a credit control agency to manage your money frees up your time and allows your staff to focus on more valuable tasks. Leave your credit control to the professionals at Daniels Silverman so you can be confident your cash flow is safeguarded. We keep you informed every step of the way. For more information on our services, get in touch today on 0800 953 3631.