Challenges in credit control

 Wednesday, 3rd August 2022 10:29

Looking after a business’s sales ledger isn’t always an easy task. And unfortunately, there are some common problems that every credit controller knows too well.

Manging customer accounts, ensuring that new customers have healthy credit and that existing customers settle monthly accounts in a timely manner; aiming to avoid late payment - can be demanding at the best of times.

Here we look at 8 common challenges credit controllers face:

Tackling difficult customers -

Sometimes late paying customers can be rude and hard to deal with, and do not react well to phone calls asking for payment. This can make it a daunting task, but a customer will most likely be unpleasant as a way to avoid paying, hoping it may put you off chasing them. It’s important not to hold back however and to stick to your credit control policy. Treat these cases just as you would any other, and if the problem remains do not be afraid to seek professional help to recover the debt.

You know a customer is making excuses that you don’t believe -

Invoices disappeared? Or a cheque lost in the post? You’ve sent an invoice by email or post but when you speak to your customer, they claim they haven’t received it, so you have to send another and wait even longer for payment. An experienced credit controller will know many excuses that customers can come up with and be able to tell apart the genuine excuses from the fake ones.

Keeping communication firm and professional when discussing late or unpaid invoices and associated excuses, can be challenging as you don’t wish to offend or push the customer away. Simply explain the steps that will be taken and the timeframe in which you will be looking to recover outstanding monies, and endeavour to try not to acknowledge fake excuses.

Those that do not comply can be added to a stop list until the invoice is paid, which can act as a push to encourage payment. Once added to a stop list, they will not be supplied again until the invoice is paid, which can act as a preventative measure, and encourage payment.

Don’t give up on chasing overdue invoices -

A good credit controller is strong and persistent. But we can all feel deflated or frustrated when your attempts and not getting you anywhere. Perseverance is key to keep going to secure payment as quickly as possible for the business.

It’s good practice to have a defined strategy for particularly tricky or aged debts. This can include the key times to chase for payment, when to refer it to management for discussion and when to forward the debt to a specialist agency.

Chasing old debts is hard – know when to stop and ask for assistance

Spending large amounts of time chasing a customer for payment can be hard, and especially if they are aged debts which can be notoriously challenging to recover.  Continuing to chase older debts – where a successful resolution remains tenuous, not only wastes valuable time, but it can also divert attention away from other invoices which may be approaching their due dates.

Instead, consider outsourcing aged debts to an experienced agency like Controlaccount plc – who are experts in their field and can save you time and money by deploying processes to maximise the likelihood of recovery. It’s worth noting that it’s good to act fast as the recovery value can diminish rapidly the older an invoice gets.

Charging late payment interest is not well received -

Investing time into chasing late paying customers can be a costly exercise and as some customers still won’t be forthcoming with payment, you can enforce interest charges and claim compensation on late payment. However, some credit controllers are not keen on charging this, due to worrying that they will offend customers and potentially make the situation more challenging. But a good credit controller should make sure to always apply appropriate charges where necessary and communicate clearly what they have been applied for.  It can really speed up the collection process, even though customers might not be keen.

Would using a debt collection agency complicate our processes?

Not at all, many companies refer debts to us that they simply have not been able to recover despite their attempts internally. The credit control team can continue with their day-to-day processes, whilst a specialist debt collection agency can take on more challenging debt. At Controlaccount plc we operate on a no recover, no fee basis so there really is nothing to lose. We recognise it’s not the first choice to use a debt collection firm as a business may well prefer to keep control and manage their customer relationships as much as possible. However, we are mindful of this and we work collaboratively with clients as we understand the importance of maintaining brand reputation.

If you are interested in finding out how we could support your credit control, contact one of our team here. With our comprehensive debt collection service alongside a number of business outsourcing solutions, we are bound to be able to assist you.




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