What Is Credit Control Really?

It has become more and more apparent that a significant number of small business owners either have the wrong idea or no idea about Credit Control.

Credit Control is not Debt Recovery although is works alongside debt recovery, whilst it does involve securing payments, mostly it is about the process before a debt falls overdue.

The Credit Control Process starts as soon as you receive an order, enquiry of request for a quote, it involves establishing exactly who your customer will be, making sure in so far as you can that they can afford to pay, if they request credit or your terms offer credit, what limit will you give them? What are their terms how will those terms work alongside yours, where do you send your invoices?

As much care is needed before you start production, provide a service or set foot on site , ensuring all steps are taken to ensure payment is made on time, many do not realise that the moment you issue the invoice it becomes payable. Your customer can pay at anytime from the date of issue to the last day of your agreed terms.

Credit Control fuses with Credit Management with the aim being to ensure you are paid on time, making the calls and issuing the chase correspondence at the optimum times is very important when you reach the final stage in the process only then does the matter move across to Debt Recovery.

A sound knowledge of Insolvency types and basic process combined with the Pre-Action Protocols and Late Payment of Commercial Debts Act are essential to perform the function well.

Below are some of the key skills and essentials that good credit controllers must have, although there are more:

Tenacity and Confidence

Money is personal in many cases, being able to open up a conversation about it is not always easy, being confident enough to ask for payment politely and often more than once, whilst adhering to strict protocols just in case there should be a need for court action or an insurance claim or the need to lodge a claim in an insolvency.

The Ability to Communicate Well

Being able to read a conversation and manage it to a successful confusion whilst staying in control with the most awkward of customers. Credit Control is as much about building relationships as it is about securing payment.

Drafting an email in context and tone with good grammar and spelling is a must.

The Credit Controller can be a Mediator, Negotiator and Dispute Resolution person all in one call.

Empathy and Patience

Credit Controllers often have to deal with people and businesses who are in hardship, have genuine disputes and can come across as defensive or argumentative.