If you're a Guardian reader, you may have seen Safe Collections' collections and partnerships manager Adam Home quoted in a Guardian Professional article on May 12th.
Tim Aldred's piece looked at the case for credit control teams as a way for businesses to safeguard their cash flow and, ultimately, to stay in business by avoiding late payment.
Adam was happy to share his ideas with Tim for the piece that you can find here: "Does your business need a credit control team?" ((c) Guardian News & Media Ltd) and we're going to expand on some of those points below.
Lead by example - if you exercise self-discipline in your invoicing processes, it conveys the message to your clients that you are proactive about payments.
Prompt, professional invoicing therefore not only means that payment is on its way for the work you have done; it also makes it more likely that those payments will arrive in full and on time.
But it's not just about how you are perceived - there are also concrete actions you can take to protect yourself.
First up, all new clients should be treated as potential credit risks - in terms both of how much they can afford to pay, and how quickly they are likely to pay it.
Experian credit reports can help to uncover the truth, whether you pay to check the customer's credit history, or turn detective yourself using freely available online information.
We've all met marketing execs who thought they were god's gift to Sir Alan, but it is important not to hand your credit control to these alpha males - especially if they work on commission.
The only incentive your credit control team should be working on is to avoid late payment and non-payment; client retention is meaningless if that customer is not paying their bill on time or at all.
Like a Boss
Internal escalation is a good precursor to taking court action or appointing a debt recovery specialist to chase an account.
When your MD gets involved, non-paying clients are more likely to sit up and listen, making this one good way to 'stop the buck' before you make the jump to a small claims court hearing.
B2C or B2B?
Different rules govern contracts with businesses, as opposed to sales direct to consumers - so make sure you always know which you are dealing with, and what it means for recovering payments.
This is where experience can be crucial, and Adam told Tim of the importance of hiring a credit control team with good awareness of the relevant rules and regulations, something that you can be more confident about if they have a qualification from the Institute of Credit Management.
We were thrilled to see Adam's comments judged as "good advice" by Philip King, chief executive of the Institute of Credit Management, in a comment posted on the online version of the article - even if he did attribute it to the article's author Tim Aldred.
Mr King wrote:
"Good credit management adds real value to a business going far beyond just collecting cash."
Philip, we couldn't agree more.
Read the original article here: "Does your business need a credit control team?" ((c) Guardian News & Media Ltd)
Image "The Guardian's redesign" by flickr user Gigajin is licensed under CC BY 2.0