Who are Credit Control Management Services?

Financial Director Mark Birchall and Managing Director Craig Martindale of Credit Control Management Services have over 40 years' experience in credit control and manage a skilled team of financial and credit professionals which support businesses every day.

What is Credit Control?

Credit control refers to the practices and processes that businesses and financial institutions use to manage and monitor the extension of credit to their customers or borrowers. The primary goal of credit control is to minimize the risk of financial losses due to non-payment or late payment by customers. It involves assessing the creditworthiness of potential borrowers, establishing credit terms and limits, and implementing procedures to ensure that customers adhere to those terms.

Key elements of credit control include:

Credit Assessment:

This involves evaluating the creditworthiness of potential customers or borrowers. Lenders or businesses review factors such as credit history, income, financial stability, and payment history to determine whether to grant credit and what credit limits to set.

Credit Terms and Limits:

Credit control involves establishing clear credit terms and limits for each customer. These terms may include the credit limit (the maximum amount of credit a customer can access), payment terms (e.g., net 30 days), and any applicable interest rates or fees.

Credit Approval:

Once a customer applies for credit, their application is typically subject to approval. Credit control departments assess the application and make decisions based on risk assessments.

Credit Monitoring:

Continuous monitoring of customer accounts is essential to ensure compliance with the established credit terms. Monitoring includes tracking payments, reviewing credit utilization, and identifying any signs of financial distress or default.

Debt Collection:

When customers fail to make payments or violate the credit terms, credit control may involve initiating debt collection processes. This can include sending reminders, contacting debt collection agencies, or taking legal action to recover the outstanding debt.

Risk Management:

Credit control is also about managing the risks associated with lending or providing credit. This includes diversifying the credit portfolio, setting aside provisions for bad debts, and periodically reviewing and adjusting credit policies and procedures.

Reporting and Analysis:

Credit control departments generate reports and analyze data related to credit management. These reports can help identify trends, assess the effectiveness of credit policies, and make informed decisions about credit extensions.

Effective credit control is crucial for maintaining healthy cash flow, reducing bad debt losses, and ensuring the financial stability of a business or financial institution. It strikes a balance between providing customers with access to credit and protecting the lender's interests.

Why Outsource Credit Control?

A small business should consider hiring a credit controller for the 10 important reasons identified below:

1. Cash Flow Management:

Credit controllers play a crucial role in managing a company's cash flow. They ensure that customers pay their invoices on time, which helps maintain a healthy cash flow. Small businesses often rely on timely payments to cover operational expenses and invest in growth.



2. Risk Mitigation:

Credit controllers assess the creditworthiness of potential customers and set appropriate credit limits. This helps minimize the risk of dealing with customers who may not be able to pay their bills, reducing the likelihood of bad debts.



3. Time Savings:

Managing accounts receivable and chasing overdue payments can be time-consuming for business owners and staff. A credit controller can take on these responsibilities, allowing the business owner to focus on other core tasks, such as sales and strategy.



4. Improved Customer Relationships:

Credit controllers can maintain positive customer relationships while still ensuring timely payments. They can communicate with customers about payment terms, negotiate payment plans if necessary, and resolve any billing disputes professionally.



5. Professional Debt Collection:

When necessary, credit controllers can engage in the debt collection process. This includes sending payment reminders, issuing collection letters, and escalating collections actions. Having a dedicated professional handle this process can lead to better results and maintain the business's reputation.



6. Compliance and Legal Protection:

Credit controllers are often knowledgeable about relevant laws and regulations regarding credit and debt collection. This helps small businesses stay in compliance and avoid legal issues related to debt collection practices.



7. Financial Analysis:

Credit controllers can analyse customer payment trends and provide valuable insights into the financial health of the business. They can help identify areas where credit terms can be adjusted to improve cash flow or where credit policies need to be tightened.



8. Strategic Decision-Making:

Credit controllers can offer input on credit policies, terms, and risk assessment strategies. Their expertise can inform strategic decisions related to extending credit to customers or managing accounts receivable more effectively.



9. Cost-Effective:

While hiring a credit controller may seem like an added expense, their efforts often lead to increased revenue through improved cash flow, reduced bad debts, and enhanced customer relationships, making it a cost-effective investment.



10. Scalability:

As a business grows, the complexity of managing credit and collections can increase significantly. A credit controller can help the business scale its credit management processes efficiently.

Contact us and we will guide you through each step.

T: 01245 976 716
E: info@creditcontrolmanagementservices.co.uk

Visit www.creditcontrolmanagementservices.co.uk

Remember we provide Credit Control with No Win No Fee and Even No Upfront Fee!!!