Credit Control

This is a one day Finance Training Course. Cash flow provides an organisation with its ‘oxygen’ & a lack of it causes suffocation and, possibly, bankruptcy. One of the key elements in ensuring healthy cash flow is effective credit control. 

This one day workshop looks at ‘best practise’ in credit control and aims to give delegates the necessary skills and knowledge to manage creditors effectively.

Who Should Attend:

Anyone who has responsibility for credit control and/or debt collection in their organisation.

Learning Outcomes:

• To demonstrate a clear understanding of the payment cycle, one must comprehend the various stages involved. It begins with the issuance of an invoice, followed by the period in which the customer reviews and verifies the invoice. Subsequently, there is a defined payment due date. After this date, the process of following up on outstanding payments commences. It is essential to monitor and record each stage meticulously to maintain an efficient payment cycle.
• To understand best practices in credit control and debt collection, one should be aware of the importance of establishing credit policies, conducting credit checks on customers, and setting clear credit limits. Additionally, employing effective communication and negotiation skills while managing debts is crucial. Regularly reviewing and updating credit control strategies in accordance with industry standards is advisable.
• Making effective credit control calls demands a well-prepared approach. Prior to the call, gather all relevant information about the customer’s account and outstanding balance. During the call, maintain a polite and professional tone, clearly communicate the purpose of the call, and inquire about the customer’s circumstances. Offer payment solutions and set clear expectations for future payments. Document the call’s outcome for future reference.
• When dealing with reluctant payers, it is essential to exercise patience and diplomacy. Begin by understanding their reasons for non-payment, which may range from financial difficulties to disputes over services or products. Address their concerns empathetically, negotiate feasible repayment plans, and document all agreements in writing. Consistent follow-ups and reminders may be necessary to encourage compliance.
• Understanding the relevant legislation is imperative to ensure compliance and protect the interests of your business. In the United Kingdom, relevant legislation includes the Late Payment of Commercial Debts (Interest) Act 1998 and the Consumer Credit Act 1974. Familiarize yourself with these laws to navigate credit control and debt collection within the bounds of the law.

Course Content:

• Fear of asking – ‘cash flow blackmail’: It is not uncommon for businesses to experience apprehension when it comes to requesting payments from customers. This fear, often referred to as ‘cash flow blackmail,’ can be overcome through effective communication and well-defined payment policies. It’s important to assertively but professionally request payments, emphasizing the importance of timely settlements for both parties.
• Understanding the payment cycle: Understanding the payment cycle involves comprehending the sequence of steps involved in invoicing and receiving payments. It includes issuing invoices, establishing payment due dates, tracking payments, and following up on overdue accounts. A thorough understanding of this cycle is essential for effective credit control.
• Defining your payment terms and credit limits: To maintain healthy cash flow, it’s crucial to define clear payment terms and credit limits for your customers. Payment terms typically include the due date for invoices, while credit limits specify the maximum amount a customer can owe before additional credit is denied. Tailor these terms to your business’s needs and communicate them clearly to your customers.
• Making credit control calls – effective telephone skills: When making credit control calls, effective telephone skills are vital. Maintain a professional and courteous tone throughout the conversation. Clearly state the purpose of the call, inquire about any payment issues or concerns, and offer solutions where possible. Active listening and the ability to negotiate payment arrangements are key skills in this context.
• Dealing with stubborn payers: Dealing with stubborn or reluctant payers requires patience and persistence. Understand their reasons for non-payment, address their concerns professionally, and work towards mutually agreeable solutions. Document all communication and agreements to ensure accountability.
• Understanding the legislation: It is imperative to be aware of relevant legislation governing credit control and debt collection. In the United Kingdom, this includes the Late Payment of Commercial Debts (Interest) Act 1998 and the Consumer Credit Act 1974, among others. Compliance with these laws is essential to protect your business’s interests and maintain legal and ethical debt collection practices.