It is surprising how many companies do not have a credit control policy – apart from the obvious need to be paid as quickly as possible.
However, it is often the case that those companies that do have credit policies do not disseminate them through the company. Credit control policies should be well thought out and be known, and have support throughout the business.
Credit policies have to be accommodated both sales and credit departments. Credit controllers want fixed and clear guidelines that apply to everyone and yet very often the sales departments want a referral for anything that will happen on an account; this arrangement is not workable in any large company or on a long term basis.
Credit policies that are too stringent will lose sales for businesses, and credit policies that are too relaxed will cause additional overhead costs and increase the risk of bad debts.
Credit Where Credit Is Due
Having the right attitude to credit control is of great importance. Too often the credit department is considered as the ‘anti-sales’ department. Credit controllers walk a fine line between getting paid and not causing problems for the business they work for.
Remember, credit controllers are, in general, the most abused employees within any company – customers lie to them, complain about them and especially when they are putting off paying an invoice, customers are often aggressive, shout and swear at them.
Remember, there is no profit until the company gets paid; this has to be kept in mind.
For more information and advice on how to implement or improve your credit control policy contact Paul Davies on 01489 550480.