There’s plenty of different types of software businesses need in order to function.
Obviously there’s the accounting software to help spit out the balance sheets and P&L statements. There’s payroll software to make sure employees are paid correctly. And, possibly the most important, there’s apps like Candy Crush to help fight boredom throughout the day.
Alongside all that is software related to your credit control process. And this is where Late Payer List comes into it’s own.
But, before we get into all that, what exactly is credit control?
What is Credit Control?
The all-knowing font of wisdom that is Wikipedia defines credit control as ‘the system used by a business to make sure that it gives credit only to customers who are able to pay, and that customers pay on time.’
And it’s not wrong.
Credit control is all about the process of giving credit terms to those customers that will be able to repay the money owed when you say they have to do so.
Just like marketing is a broad umbrella term that encompasses the things like the product you sell and the price that you sell it, credit control is the term that houses things like credit approval, credit limits and, of course, the debt collection process.
The cornerstone of issuing credit to your customers is a credit check. This is what you’ll be basing your decisions from. A credit check helps you, the business owner, identify the right customers for whom you will allow credit services.
You’ll be asking your customer to provide you with credit references and important documents such as the following, that will better inform your decision:
- Credit reports
- Credit references (from institutions like a bank)
- Financial statements
These will give you an idea of the type of customer they are and their ability to pay back debts that they owe on time and in full.
This is where Late Payer List begins to emerge as an important tool in the credit control process. Late Payer list allows you to look into customers as part of your credit approval processes for customers who request it.
After all, it’s better the devil you know than the one you don’t.
Many debts get listed with the established Credit reference bureaus however, there is a greater number that don’t. Many small businesses choose not to register a customer with the Credit reference agencies or take legal action and simply write the debt off at the end of the financial year.
Unfortunately, it is a much easier and time efficient option. The problem with this situation is that many late payers fly under the radar. Late Payer List has simplified the listing process thereby allowing even the smallest debt to be listed without all of the hassles and still claim the bad debt at the end of the financial year. Late payers now have nowhere to hide.
The Importance of Credit Control
For businesses large and small, credit control is an important system that prevents businesses from falling into incorrect allowance of credit to customers and, therefore, helps businesses avoid a lack of cash flow (one of the major causes of small business failure).
So, how can you safeguard your business with tight credit management?
It’s about doing the basics correctly:
- Do your homework on your customer using Late Payer List
- Invoice on time and to the right person
- Always state your customer’s credit terms on the invoice
- Have an idea of your debtor days (the average time taken by certain customers to repay their debts)
- Have a debt collection process in place.
On that last point, tools like Late Payer List are incredibly important aspects of any well-managed credit control strategy.
One of the main aspects of credit control is chasing customers when they don’t pay. Late Payer List allows you to easily register a late payer’s details and share it with other small businesses in order to remind the late payer via email of the debt that is owed.
By reminding your customers with a comfortable nudge, Late Payer List holds them to account. That allows you to get back to the important things… like Candy Crush.