Credit Control??

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi guy's. Hoping some of you may be able to help. I work for a medium sized organisation, which to date has not had anyone actively chasing outstanding debts. I have been approached to impliment a system of credit control to decrease the amount of such current debts.
Has anyone had any similar experience having never been involved in credit control before? Also are there are books or reading material etc which would be useful anyone could recommend?
Any advice would be greatly appreciated!! I know this can be a political subject in the way you chase debts, and so dont want to upset anyone!
Cheers

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Credit Control??

    However you proceed, if your customers aren't used to being chased, you will need to be careful.

    We had a few customers stretching their credit a little too far and it had to be done diplomatically.

    Good luck!

    :?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Credit Control??

    You mean paying a them a visit with a baseball bat isn't the right approach :) Seriously though, I've never had much problem with late payments. I give a fairly generous settlement discount - though in effect this is more of a late payment penalty - and that seems to do the trick. I know most of my regular clients on a fairly personal level, so if there is any chasing to do diplomacy is most certainly essential.

    The Tech level Unit 15 covers credit control so you might find something of use in the textbooks for that unit.

    Chris

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Credit Control??

    Thanks for your comments chap's. I am due to start Technician in January as i'm yet to finish a simulation for intermediate. Will try and source the text books early and have a scan through.
    Thanks!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Credit Control??

    I too implemented a credit collection system so good luck!!! Collecting debts is quite hard to do and it takes a special kind of person to do it - not everyone can!

    Vital skills you need in equal measure are diplomacy, firmness and a thick skin. While most debtors will pay on time, an unfortunate element will always take the pee and push their luck.

    The first thing to do is offer credit terms. If you already have these, then make sure your customers are aware of them. I work for a glazing manufacturing company and offer 30 days EOM which is more than enough for many or our customers.

    Those who go over this get a phone call on the eight overdue day. On the fifteenth day, I write them a letter and enclose a copies of their invoices thus eliminating the oh so common "I don't have the invoice" excuse.

    On the twenty-ninth day, I write a harsher letter threatening legal action. Most pay by this stage mainly to get me off their case!

    Those who still owe, I often see in person, even driving out to their own businesses if I have to.

    Don't listen to hard luck stories and be resolute. More often than not, they've been paid, kept the money and just aren't paying you.

    Just remember that customers are not customers if they aren't paying for their goods - they're freeloaders and merely using you as a bank.

    Good luck!

    Robert
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Credit Control??

    Good explanation -
    I sit opposite 2 colleagues, both credit controllers so I get to hear 1st hand what goes on with clients who don't pay up.

    We specify on all our invoices that payment must be due within 30 days of the date of the invoice (or the date they recieve the invoice in certain circumstances).
    At this moment in time there's hundreds of thousands of pounds owing to us through various clients - some of which are genuinely struggling to pay up which is when my guys offer them credit agreements of so much per month (post dated cheques are requested by us).

    Some clients, when set up, have an extended payment terms (default is 30 days) but some have up to 90 days so it is quite important to start putting "Pay By" reference somewhere on the invoice, thus informing the client there is a deadline to stick to and giving you a base platform to carry on to legal action if it comes to that.

    If the clients go over the payment date, we phone them to remind them about the invoice and offer help in terms of payment if it is required, a letter is also sent out - all correspondance is recorded in a PC application which has a section for Each client on our systems.
    If it gets to a certain point where the controllers have done all they can, the client is informed legal action is being taken and the debt is passed to our incasso department who start proceedings.

    Currently we don't send invoice copies out until they are requested blobby, but I think i'll put your practice forward to our controllers.

    But Hondastar, just beware the excuses you'll hear - you're guaranteed to have at least one client that has a family death each time you chase payment.

    Good Luck.
    Jamie
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Credit Control??

    Thanks for your comments blobby & jamie, i think we can only benefit from our experiences or in this case each others. Given me plenty to think about! Have my approach plan as it were in my head, but putting this into practice is for some reason more difficult!
    The trouble with our industry as civil/ structural engineering consultants is that many of our customers are in the building trade. I have been told that standard terms with in this industry are usually EOM 90 days and so that is the period the clients are used to having before settling up! Will have to play it buy here and see how it goes!
    Thanks Again! Dean
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Credit Control??

    Just a thought, this sounds an excellent idea for your project for technician level. I did mine on something I had implemented the previous year and as I had kept all my notes, it was half written already!

    Jackie
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Credit Control??

    Thanks Jackie will bear that in mind and keep any notes i happen to make! Dean

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