Credit managers deal with a variety of customers – some of whom have a good record for payment and others that have little or no regard to the agreed payment terms and conditions.
One-fifth of UK corporate insolvencies in the past year were caused by late payment or the insolvency of another company. Your business can have a great product or service and a strong team, but if problems occur with gathering payments things can quickly spiral out of control.
In order to cash management, excuses are part of the job. From “We haven’t received any invoices” to “That person is not available right now.” What are the phrases you hear every day? And more important, what are the 3 easiest ways to deal with them?
Timing is always on our minds. When’s the best time to send out an invoice? When’s the money due? How long should we give before chasing in a payment? So what can you do to help ensure you get the right action, the right person and the right timing for your order to cash process?
How can you speed up the AR process, while also reducing errors and improving cash flow? By automating AR, you can improve your own data, get payments processed faster and free up time so your AR team can provide better customer service.
How do you determine the amount of credit you’re willing to give a customer? Annual accounts can help you make a more informed decision and help you avoid credit risk. It can also help you to make predictions about a company’s future success, which could lead to future opportunities for your organisation.
What’s more important the technology that you are using or the people that work with it? Technology is great, because it can help make your job so much easier, automating collections processes, collecting information and analysing information. But we also believe that people are, and will remain, integral to the collections process.
For many companies, extending credit to customers is standard practice. But just because it’s normal doesn’t mean it’s not risky – and to keep cash flowing, effective credit management is vital.