Why is credit control important for family business?

If your family-based business is struggling with poor-paying customers, you should hire a credit control team. Effective credit control is important for the success of a business, no matter its size, because it sustains its growth. Being paid on time significantly reduces costs, like overdraft charges, not to mention that you do not have to spend a great deal of time chasing down customers. If your business does not have a credit control team, then it is time you hired one. Even if it is for a temporary basis, you should hire a company specialising in credit control London. Many issues can be avoided by giving credit only to customers who are able to pay on time.

Checking your customers creditworthiness

You give customers the benefit of the doubt. In other words, you decide to believe that they are able to pay their bills. Unfortunately, all customers are not creditworthy and deserving of terms. Many of them will pay their invoices late, even if they are reminded to. How does this affect you? Well, you will have to wait longer to get paid, something you cannot afford. To prevent jeopardising your family business’ cash flow, you need to set in place a credit control system. One of the key steps is carrying out checks to make sure that customers are able to meet their obligations. Checking the creditworthiness of a prospective customer via a third party service is the best thing you can do for your company. You will have all the information you need regarding the customer’s current and future ability to pay invoices, not to mention their inclination to honour debt obligations.

Implementing a chase policy and extracting owed money

If you do not have a credit recovery policy in place, then it is time you formulate one. If you do not dispose of the necessary resources to chase after poor-paying customers, then you will benefit from the help of a credit control team. It is the team’s job to take care of debt collection and issue proceedings. Instead of going through thousands and thousands of clients and figuring out which one you should chase first, you can handle issues that are more important for the good functioning of your family business. For special undertakings such as debt collection, you need someone with a special skills set. The fact is that your team may not possess the necessary qualities for extracting owed money.