Credit Control

[Claire Freer]

Hi,
I am a partner with The Bateman and Freer Partnership. We offer an Outsourced Credit Control service to all SME's.

We also offer help to start up's because getting it right in the first instance is crutial and we provide a consultancy service for companies who already have a credit control team but may need some of their processes and procedures updating.

If you have any burning questions, please let me know.

Claire

The Bateman and Freer Partnership
Outsourced Credit Control Specialists
www.batemanandfreer.com

[lady macbeth]

ooooh me! me! - I have a question !!

We are usually ok with overdue payments and dont have that many issues but I feel that my invoices and statements need some work.

Is there anywhere that I can get examples of 'best practice' for documents such as statements? I just need some ideas for wordings that nicely say ' Hello!! remember me - I'm the one you owe money toooo!'

I read somewhere the other day when trying to sort this out that we are allowed to claim interest for outstanding payment. I cant see that we would ever do this tbh but I wanted to know where I need to make it clear that its an option and how to word it.

If you know of anything might help me that would be great.

thanks

:)

[Claire Freer]

Hi,
You could try using: www.bizhelp24.com

They have loads of different templates for collecting outstanding invoices and have other usefull information too. Business link also have loads of different templates which are very useful.

I would recommend first to send out a statement showing the amount outstanding, the date of the invoice and the date it is due for payment. I would send out a statement about a week before the invoice is due. This way, if your client has any queries, they can be dealt with quickly and hopefully the invoice will be paid on time. Plus, some businesses will only pay when they receive a statement!

If the payment has not been made on time, give them a quick call. A telephone call can't be ignored but a reminder letter can be thrown in the bin!

The Late Payment of Commercial Debts (Interest) Act 1998 -
The act only relates to commercial debts and cannot be used for individuals.

It can only be claimed once a debt is deemed overdue. A payment is late once the agreed credit period or the default period (30 days) has expired.

This act is your statutory right, however, many companies use it to deter late payments rather than going through with charging it.

You are entitled to charge, 8% above the bank of Englands base rate. (There is no VAT on interest.)

I would recommend putting a short passage in your contract to show clients your intentions if payments are late. however, even if it's not in your contract, you can still charge it.

I hope this helps?

Claire

[Rob]

LM,

Also check out The Better Payment Practice Campaign (whoever came up with that name should be shot) - http://www.payontime.co.uk

There are a lot of articles, advice and tips on getting paid, handling excuses etc.

[Dr.Jose Sebastian]

Rob,
Thanks for your observation on my posting.

Its wonderful to find that campaigns like this are there in UK. Seems in our state also we have to do something about it. Without your forum, perhaps i would not have heared of it. Thanks a lot for your forum

jose

[Claire Freer]

If anyone is interested in receiving some top tips on credit control issues on a bi-monthly basis, our E-News letter is packed full of useful hints and tips.

If you would like to receive a copy or you know someone that does, send me an email to:
claire@batemanandfreer.com


Our next one is due out towards the end of July.

Claire

[strategic]

I'm sure you will get a ton of great templates from in here, but I thought it worth mentioning that sometimes the incentives are the best way for chronic slow payers.

I started putting in a note inside the invoice document that simply stated that we would give a 2% discount for prompt payment received by close of business on xyz date (usually 14 days).

And then we would 'remind' clients that accounts not paid by the due date on the Statement would start to incurr interest fees @ whatever rate per calendar month.

I was surprised the amount of businesses that jumped at the opportunity to save 2%.... but since we were a reasonably 'big item' cost in their budgets I know it did add up to quite a bit $$ but I had no idea these people were so miserly!

Anyway, honey & vinegar.... offer a discount, while making the veiled threat of penalty payments.... it might help improve your cash-flow with the ones you know are chronic slow payers.

- Helene Malmsio

[Claire Freer]

Helene is right, especially in todays climate of the credit crunch. Giving a discount for early settlement could save you lots of money in the long run. Especially if you have bank loans or an overdraft.

Just think how much you are paying in interest on a loan or overdraft for the period your client takes to pay. You could be putting that money to better use such as marketing or sales to create more customers instead of it sitting in your customers bank.

Slow paying customers = lost opportunity

Find out when your clients make payments? If they make payments on the
15th of the month and you send your invoice out at the end of the month, you could be waiting 45 days for payment because it may take 2 weeks to work it's way through the sign off process. Change your billing date.

Claire Freer
The Bateman and Freer Partnership
Outsourced Credit Control Specialists
www.batemanandfreer.com

[lady macbeth]

Oooh the incentive thing sounds good.

The vast majority of our customers are local government so we dont have huge problems with them but occassionally we do get business customers and they always want a discount for even buying two of something. They are the ones with bad payment and rude staff issues lol I had started making them pay by pro-forma but maybe we could look saying no discount BUT an early payment discount. That way we both win!

Will take a look at the web sites :)

thanks

Samantha

[Rob]

I'm bringing up an old thread here but on my blog today I have comments from the Forum for Private Business on the issue of late payments by large companies.

It's clear that this problem is going to get worse as the economic downturn continues (I've avoided using that 'R' again!).

You can see the survey results on late payment here (http://www.smallbusinesssuccess.biz/forum/blog.php?b=46).

Has anyone witnessed a significant change in payment terms over the last few months?

[Tisha09]

Thanks for the information.
1) Pay your bills on time it is the most important contributor to a good credit score.
2) Get professional help.
3) Close unused accounts.
4) Keep older accounts: Your length of credit history is another factor. Keep your older credit cards open so you have a longer history to share.

[stoc12ks]

"National Credit Control" would introduce a credit card system of currency, and nationalize the investment capital of the country. Government would be divorced from industry, and become the central accounting agency for the economy, controlling the master balance sheet of industry. In doing so, all industrial debt would be eliminated, and the government would be placed on a cash basis, without borrowing from its citizens.

[smith 18]

For any businesses which provides "open terms" policy to their customers, it is important to have a cap on the amount of credit given. Every customer is given different amount of credit in relation to their sales turnover.

[kemchuB]

Credit control is an activity aimed at serving the dual purpose of (1) increasing sales revenue by extending credit to customers who are deemed a good credit risk, and (2) minimizing risk of loss from bad debts by restricting or denying credit to customers who are not a good credit risk. It is very helpful but, what it can do to help from Personal charge cards that fall under the CARD Act, whereas company credit cards are subject to far less legislation? It was said that Tighter regulation urged by Congress for business credit cards, personalmoneystore.com/moneyblog (http://personalmoneystore.com/moneyblog/2011/06/14/business-credit-cards/). Part of the concern over the non-regulated status of business credit cards is that credit card companies are offering the cards to people who aren’t business owners; all a customer has to do is apply for the account just like a normal credit card and start using it once approved. The senators also are concerned that business cards make up a fair portion of direct mailed credit card offers, according to BusinessWeek, as they cite a Pew study that found 9 percent of all credit card offer mail between 2006 and 2010 was small business card offers.

[jackelin]

If you want to keep your credit rating clean and good then you must keep some important things in your mind like always repay all of your loan's EMI's on times, always repay your credit card payment on time, provide proper right information to your money lender.

[Rob]

As strange as it sounds it actually pays to borrow money in order to improve your credit rating.

You are seen as a better risk if you can demonstrate that you have a proven track record in paying existing debts.

Start borrowing small and work your way up.

[jackelin]

People must control their unwanted and un expected expences then they can manage their credit. We must not borrow the money more than our repay capability.

[qianming]

National Credit Control" would introduce a credit card system of currency, and nationalize the investment capital of the country.