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Worried about credit control?

23rd November 2017

by Daniel Bowles

We all know that cash is king in a business. No matter what your profitability is if you don't manage your cash your business will suffer.  

However, cash recovery can be a daunting and unfamiliar task to a lot of people. To give you an insight into the world of credit control we've spoken with our in-house credit controller Helen Bohuslaw.

 What do think is the hardest part of being a credit controller?

Chasing debts can be very hard especially when having to constantly follow up on the same recurring overdue accounts. Chances are the account being chased probably has other debts, making it harder to secure payment ahead of the competition. Making a decision on whether to be lenient & understanding, or to go in harder and be fairly autocratic in any given situation can also be tricky, because in the long run it can either pay dividends or backfire.

 Do you use different approaches for different customers?

As each customer is different, it is essential to have an adaptable and pragmatic approach to suit each individual. A new customer would not be approached in the same way as an established one. Knowing your contacts starting from the accounts assistant to the remaining hierarchy of the customer’s organisation is crucial, and developing a good relationship is essential. Depending on the strength of each relationship would depend on the appropriate approach adopted.

 How do you find dealing with a customer during a dispute? 

Disputes are never easy, but when they are resolved can give both parties great satisfaction and cement a relationship.  The aim is always to resolve them amicably and to mutual benefit. Queries are the bane of any credit controller’s life as they can be time consuming and become very convoluted. The saying that “the customer is always right” does not always apply, but providing you come across like you have thoroughly investigated the matter, are armed with all the facts and have done everything in your power, gives you the upper hand and makes the dispute easier to handle.

 What's the longest it’s taken you to recover a debt and any advice for people chasing long term debt?

It has taken me up to 4 years to recover a single debt, and I am currently negotiating another payment plan which may take 3 years to recover. Never give up even if a situation seems dire. Always stay in contact and keep the lines of communication open. Sometimes it’s just a case of helping a customer through a bad patch. Not all long recoveries are successful, but in 20 years I’ve seen up to 80% succeed so always worth persevering.   

 How important is it to have the support of others members of staff?

It is of paramount importance to keep everyone, especially colleagues on side and aware of credit control difficulties. You are part of the same organisation and working together means mutual understanding and ultimate success. My credit control function is enhanced by the support I receive from other members of staff and I strive to reciprocate where required.

 Any others tips regarding credit control? 

Continually contacting clients for money in today’s economic climate can be daunting, even for the most experienced credit controller. When contacting a customer, I think it helps never to mention the wording “chasing” it’s a bit dated, cliché and usually irritates the customer. Instead break the ice in other ways, ask if they are able or in a position to settle an invoice or account, ask if everything is ok or if they have any queries, or when a payment is earmarked? Anything but the word ‘chasing’. This approach usually works for me.

We hope that this article has helped provide you with tips to assist with your credit control. If you’re looking for any further help with your business please don’t hesitate to contact us. 

    icaew chartered accountants  acca