Newly released Business Link data shows that nearly half of UK small and medium sized businesses have no efficient system in place to chase unpaid invoices. Implicit in this statement is that systems do exist. Efficiency is one thing but effectiveness is more fundamental, yet the two are closely related. Many businesses use very traditional credit control processes with a lot of manual correspondence and little use of the phone. A lot of credit controllers are actually afraid of using the phone, largely because they only chase invoices after they are overdue so every phone conversation is negative and defensive.
Equally, in smaller businesses it is a real challenge to employ, in one or two credit controllers, the mix of skills required to effectively support trading, manage credit risk and minimise DSO. Modern businesses realise that credit control is an increasingly specialised area and needs to be resourced and managed as such.
With increasing levels of business fraud, heightened credit risk and delayed payment by customers, effective cash management and credit control has never been more important. Today's credit control team needs to have a broad range of skills and software tools to support the business. Look at your team. Does it meet the demands of your business today and tomorrow? If not then you need to take action, but before your recruit take a look at outsourcing. You will get a higher skill level at a lower cost. For smaller businesses you can get a full time credit control provision for the cost of a part-time clerk.