10 reasons to adopt handheld technology
Whilst the last two years have been challenging for most...
2020 has been a rocky experience for most, but this uncertainty can be used to businesses advantage to ensure processes and systems are optimised for better results in 2021.
Following up with clients and customers for the credit you are owed is a tedious and time-consuming problem. This part of credit control is very much its own discipline. Unfortunately, providing an excellent product or service is no guarantee you’ll be paid for it on time or in full. To keep complete hold of your credit in 2021, consider the four following processes.
It might seem tempting to leave credit control processes to be done on an ad hoc basis. But non-payment and late payment situations are much more common than you might think.
In 2020, data gathered by the digital banking platform Tide, found that small-to-medium UK enterprises are owed £50 billion in unpaid invoices. This survey of 1,000 UK CEOs found that the average British SME has five invoices outstanding, amounting to £8,500 being owed. Workers were spending an average of ninety minutes per day to solve this issue. When dealing with small invoices, one at a time, it is not often clear of how much is outstanding as a total and how much your business is owed, implementing a proper structure for collections alongside credit control software can save your business in the long run.
Ad hoc credit control only works in very narrow situations. Preparing a workflow for this problem makes much more sense, especially if you expect your client base to grow. Not only is it a good idea to have a preparation process in place, but it also makes even more sense to automate that process as much as you can with credit control software.
Most cycles of chasing up a client begin when payments are late, incomplete, or otherwise wrong. Optimum credit control should proactively step in ahead of the problem before credit limits are surpassed.
Sending reminder letters and emails about payment schedules helps build a good core client relationship. It establishes you as a serious partner who values the services and products you provide, and it shows your client that you want issues resolved simply and quickly.
A client relationship where you only speak about deadlines when they’ve been surpassed is not healthy. With communication lines active at earlier stages, you have a relationship that will last longer and be stronger.
For normal credit control, a one-size-fits-all approach may be adequate. But when aiming for optimal credit collection, these messages have to be put in the context of your broader client relationship. If your relationship doesn’t respect details, that relationship isn’t healthy.
Some clients may be VIPs, possibly because of an extended relationship or strategic partnership. Their importance means that communication should have a different tone to most. You might want to send out their messages less often, or at co-ordinated intervals. If a client is a VIP, your credit control software should be managed in a way that acknowledges that.
In contrast, clients that breach credit terms regularly need much more direct treatment. Individual breaches might not be a problem, but patterns of behaviour need acknowledgement. Often it is not clear to the human eye, if dealing with multiple accounts, who the regular offenders are. A dedicate credit control software system will ensure all of this information if provided to you at the touch of a button. Ignoring this gives the client licence to take advantage of your leniency. Make sure your expectations are communicated clearly.
Keeping track of which clients require which style of approach can be difficult. It requires adding an extra layer of data collection and record-keeping into your credit collection processes. This is why an automated system is invaluable. Not only does it make credit collection easier, it makes it more efficient.
Letters and emails are the standard approaches to credit control. To go above and beyond, you need to consider alternative approaches. You also need to know when and how such approaches are most likely to get a positive response.
While letters can be thrown away, and emails can be deleted, it is far harder to ignore the ringing of a phone or someone knocking at the door. These kinds of methods make sure that your clients and partners know that you are very active in pursuing the money you are owed. However, phone calls and visits are also time-intensive. You can send twelve emails at once, but phone calls are only one at a time. These methods are also socially seen as more intrusive, and when overused has the potential to damage a client relationship. You might see yourself as only knocking on the door, but from the other side, it might seem like hammering.
These kinds of techniques are powerful, and power is nothing without control. To control when, where, and how you use things like phone calls and site visits, you need a whole host of extra information to get right. Consider making use of the data from your CRM to organise and co-ordinate this kind of action. A good relationship gets healthier the more you know, and what good is knowing if you don’t use that knowledge?
The more you want your business to grow and develop, the more essential optimal credit collection becomes. Even a well-co-ordinated credit control process can be extremely time-consuming if done manually. This makes automation more important than ever.
OrderWise’s suite of Advanced Credit Control Software features allow you to perform all your credit control tasks at maximum effectiveness with minimum effort. Letters and emails can be generated automatically. Specific tones can be selected for particular clients. Chase cycles can be started automatically, before credit terms are breached. CRM activities can be generated to organise manual interventions as and when required. There are even procedures for intelligent pause options, and ways to view where and when all your credit should be arriving through one window.
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