4 Ways To Get Customers Paying Faster

In every company I have worked with, in many different countries, one thing is the same.

They all need their customers to pay faster.

It has been my privilege to work with so many of them. So how do you make it happen? Here are 4 steps, and I will give you all 4.

What credit control means

Credit control is the control a firm has over its trade debtors, to make sure customers pay their debts on time and to cut the risk of bad debts.

Trade debtors just means the customers who owe you money.

Step 1: Check new customers first

It may be important to check how creditworthy a new customer is. That matters most if your trade involves large amounts.

You do it to set credit limits and terms of sale. Do they pay up front, pay later, or pay in instalments?

There are agencies who will check your prospects for you. It may cost you a little. It may save you a lot in the long run if the prospect turns out to be a bad credit risk.

Step 2: Send invoices regularly

The sooner the customer gets the invoice, the sooner he can pay.

Step 3: Send monthly statements

A statement is a form that lists which invoices and amounts your customer still owes you. It reminds them.

I send them out monthly to every customer with an open invoice, whether it is past its due date or not.

I do this whatever other credit control actions I take.

Step 4: Keep good records

This is the one that is easy to overlook. Good records let you see at a glance who owes you what.

Without that, it is rather difficult to have any control over the credit and cash flow of your business.

It may also be a good idea to set a company policy for all four steps, so it is written down and everyone follows it.

Continue with Part 2. In the meantime, Flourish and Prosper. Lisa