One of the single most important aspects of effective credit control in any business is ensuring that you know exactly who you are dealing with, before any credit is provided.
If you don’t know who your customer is, it is impossible to correctly identify the risk involved in providing credit and means your company is doing business “in the dark”.
In the first of the Managing Cashflow guides from the BIS and ICM they deal with exactly this issue and provide a simple and informative breakdown of the key points any company needs to be mindful of.
From being wary of “tame” credit references to ensuring you have all the information you need from the outset, this simple one page guide will help you avoid the most common credit control pitfalls.
You can download the guide below:
In addition, our MD Sid Home has the following advice for businesses when vetting a new client for credit:
“If you use a credit referencing company like Experian Small Business to vet your new customers, make sure you review any previous companies the directors were involved in.
You may find the directors have previously been involved in other companies with a history of late payment or worse, corporate insolvency.
Finally if your customer is reluctant to provide all of the requested details promptly, or pushes hard for delivery of goods or services before you have received the same, your company should exercise extreme caution. As these are both classic warning signs of trouble ahead.”
If you have a new customer you are unsure of or are facing a delay in payment from an existing customer, feel free to contact us for a free, no obligation credit health check.
The Managing Cashflow series of guides is produced by the Institute of Credit Management in association with the Department for Business Innovation and Skills. The full series of guides can be found here.