3 signs that you should outsource your credit control

Nov 11 2019 Financial Management

Credit control can be a topic that causes stress for small and large businesses alike, and more importantly the business owner. Remember, a sale is a waste of valuable business resources until the cash is collected.? Improving credit control is the easiest way any company can access “new” finance. 

A good credit controller has competencies and skills that can be difficult to find. They need to be very outgoing, assertive, organised, tenacious, and highly professional.

Some of these qualities are not demonstrated by your average bookkeeper! 

Most SME businesses cannot afford and may not need a full-time credit controller.? Furthermore, credit control can be time-consuming, and stressful, and if completed in an unprofessional manner, can result in a damaging loss of business. 

But how do you know when it’s time to look at insourcing/outsourcing? 

It’s important to remember that whatever size your business, outsourcing can be a cost-effective and reliable way to keep cash coming into the business, and often pays for itself. Once deployed, credit control can be managed by limited hours per week or month, and becomes very low cost. 

Here are 3 clear signs that you should start to consider talking to EFM about your company’s credit control. 

Do you recognise what poor credit control is? 

So many companies continue with poor credit management and offer their customers unintentional free credit. In SME land this free credit costs the business and is a huge business risk. If a customer becomes used to paying later, they are likely to always take advantage of this, and if the customer then fails, the loss to you is far greater than it should have been. 

Not only does regular late payment put a lot of stress on the business, but it could also starve your business of the finance needed for growth and will stop you from reaching targets and goals across all departments. 

Although a lack of effective credit control may have many causes, it can almost certainly be helped by a skilled credit controller. They will be able to dedicate the time at the right time, and supply expertise that you may not have internally, using all their experience and best practice to improve collection. 


Struggling to allocate the time to manage your credit control 

Credit control is rarely a task to dip in and out of. Perfecting it takes a lot of time and practice, ensuring that each of your customers is being proactively contacted at key times and that any invoicing issues are dealt with efficiently. 

For many smaller businesses, credit control commonly falls under the remit of the owner-manager, office manager, or accounts person – who then place lesser importance on it than their day-to-day duties.? It’s important to remember that most people simply do not like asking for cash. 

Invariably, if credit control gets out of control, this consumes even more time and cost for the business. The key to credit control is to resolve issues on a timely basis and thus get paid sooner. 

Outsourcing or Insourcing your credit control means that it will be done systematically which will naturally drive customer behaviour to pay sooner. Furthermore, an outsourced professional will be more detached when dealing with the customers, leaving the business owner to maintain strong relationships with the customer. 

By assuming the responsibility for credit control, they can give you and your team back the time to focus on what they do best and avoid the overhead of employing someone full-time. 

Deteriorating customer relationships or a lack of repeat custom 

Ending a business relationship due to disagreements regarding late/nonpayment not only impacts repeat business but also may result in poor reviews, recommendations, and ultimately your brand. 

Although at times a relationship breakdown is unavoidable, these should not be due to credit control. Remember, you have an absolute right to be paid for good work! 

A breakdown of communication can be due to the process of invoicing and collecting payment, especially if your business processes are not timely, robust, and professional. Invoicing and cash collection are two of the most fundamental routine business processes that all businesses need to get right. 

Deploying regimented measures at the right time will bring any issues to the fore, and then will almost certainly speed up cash collection and therefore save difficult conversations downstream. 

How we can help 

EFM has a dedicated team of experienced, multi-sector credit controllers that deal with many types of customers and will be able to manage your company efficiently and professionally, contacting your customers at the right stages of the credit period to make sure you get paid on time. 

We can work on-site, thereby liaising with account managers and the business owner, or offsite. We will work with you to design a process that is right for your business, one which takes into account your requirements and boundaries. 

If you’re looking for a professional & outsourced credit control service, contact the EFM team by email to set up your free one-hour consultation. 

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