Get on the phone and talk to your customers. OK so that wouldn't make a very interesting or extensive blog post but it's the simple truth. Good credit control is about using the phone and following up invoices before they fall due for payment. Let me explain.
Scenario 1 - a business invests in some great software. It automatically emails statements and sends reminder letters. Requires a lot of set up and maintenance from the business. They sit back and expect collections to improve and debtors to reduce. They don't. Letters and emails can easily be ignored and the recipient feels no shame in doing so. After all they probably get 100 emails a day
Scenario 2 - a business engages someone to do follow up calls and build a relationship with the Finance contact at the customer. Need to get the right person with the right personality to be comfortable chasing for cash but not too agressive. Calls don't get ignored, particularly if they know you will always ring until you get connected. Makes ure you get the right person to speak to though. We often come across credit controllers who are afraid of the phone....so be careful. Couple of months in with this new calling regime and debtors are reducing and cash flow looks healthier all round
You also need to make sure you get the right metrics to measure the performance of your credit control. At the very least you should be looking at a cash flow forecast based on expected payment dates. Each week you should review an analysis of older debt and ensure actions are in place to fix. Set targets for aged debt e.g. nothing over 60 days overdue. Look at the average days it takes your customer to pay and track the trend which should be going down.
Lastly the speed with which you resolve queries and fix invoicing problems is the biggest single contributor to successful credit control and prompt payment. Monitor your queries, fix the problems giving rise to them so you can avoid in the future, and ensure that all queries are resolved quickly. No queries = more cash in the bank