Category Archive: Credit Control

1. Did you know the ‘A’ Team now has a ‘B’ Team too ?

   April 25, 2018 11:20 am Leave a Comment

   Finally the Government are listening to us….!

    

   

   For those of you that know us well, you will know that our editorials are always packed full of advice and guidance about :

   -how to try to avoid a bad debt occurring in the first instance, then

   -secondly should you sadly have the mis-fortune of experiencing a delayed invoice payment, how best to attempt to recover your debt thereafter.

    

    

   Well it now seems that our publications are reaching higher plains ? The essential advice and guidance that we’ve been passing on to our valued contacts over the last few years has reached the corridors of power in Government.

    

   It is clear that our wise words have been both read and understood in Parliamentary circles, as the very same steps, hints and tips we’ve been preaching for some time can now all be found on the website of the recently created Small Business Commissioner https://www.smallbusinesscommissioner.gov.uk

    

   This Business Commissioner role is to act as a national champion for small businesses and support them in payment disputes with their larger customers.

    

   The role was established in response to the discovery that nearly half of the UK’s small businesses experience late payment.

   Payment processor, Bacs estimated that a total of £26.3bn was owed to these businesses and given that we all rely on the UK’s 5.5 million small and medium sized businesses for jobs, goods and services, an unfair payment culture that hurts these firms has no place in our economy.

    

   “There is simply no excuse for a business culture where supply chain bullying or poor payment practice are acceptable. FSB research shows that poor payment practice is on the rise, causing 50,000 business deaths each year.” Mike Cherry, national chairman at the Federation of Small Businesses commented

    

   Our advice is to keep the above link handy and use the information as a reference, to help you create a strong and robust credit control process.

    

   We see our role in industry to be there for comment and to reflect both sides of any argument. As a result, we are often drawn into discussions on public forums such as LinkedIn and Twitter about the need of some people to name and shame the companies who purposely delay payments.

    

   Although there used to be such forums as ‘Credit Circles’ in the past where like-minded similar industries shared knowledge on bad payers, this practice has fallen out of favour given the rise in credit compliance and data protection regulations.

    

   Well now one of the Commissioner’s roles is to be that point of reference when it comes to naming. The Commissioner actively encourages that people who have suffered through unfair practices at the hands of late payers contact them and complain.

    

   The naming part of the process may prove cathartic to some but sadly the likelihood of these companies being shamed will probably not materialize.

    

   That being said, the creation and potential evolution of the Commissioner is a step in the right direction to resolving issues of late payment and we for one advocate the best practice the Commissioner’s office encourages… even if they have straightforwardly stolen from the industry experts… 😊

    

   To read more of hints & tips check out our blogs

    

2. How to Avoid the ‘Ripple Effect’ of Insolvency

   March 22, 2018 8:25 pm Leave a Comment

    

   Bad things happen in threes ‘they’ say…

    

   First it was the ‘toys for big boys’ retailer Maplins that entered insolvency. Then there was ‘the toys for toddlers’ retailer Toys R Us closing down. Now there’s talk of the’ toys for tots’  retailer Mothercare having to seek protection from its creditors after posting two recent profit warnings.

                                                                                           

    

   Couple these big high street brands failings with several other high profile industry giants like Carillion and Dukes of London, you quickly realise there is no logic in the saying… ‘they’re too big to go under’.

    

   Ripples from high profile insolvencies travel much further in the pond of business than just the immediate suppliers. Yes, unfortunately many major suppliers may also face insolvency now that their ‘meal ticket’ has gone under and this insolvency will reflect upon their own suppliers who will face the prospect of not being paid.

    

   However the big question is… how and where are these ‘middle’ suppliers going to pass their burden of debt on ?

   What must we, as smaller businesses, do to heed the lessons to be learned from the ripple effect of this debt pain.

    

   1 Try not to earn only big ticket items.

   Tempting as it is to chase ‘the Golden Goose’, recent events show that no business is too big to go under. Use the big ticket invoices to re-invest in practices to also bring in smaller but more frequent residual clients.

    

   2 Limit your risk through sensible invoicing.

   Analyse what your invoicing for. Can you break an invoice down into parts and invoice smaller but more regular accounts. A none payment of a smaller invoice is an indicator of bad things to come.

    

   3 Be aware of your exposure at all times.

   Good credit control is all about being vigilant and organised. Regularly monitor your credit limits and analyse the payment days of your customers. If you find a customer exceeding both, take action to reduce that exposure before it’s too late.

    

   We were once taught that business is all smoke and mirrors and recent events show that some of that may be true. The key for smaller businesses is to reverse that mirror, look closely at yourself and your practices and ask… ‘what can I do to avoid the ripples of debt pain lapping at my door ?’

3. Have you GDPR Proofed your Credit Control Process?

   February 21, 2018 3:30 pm Leave a Comment

   Have you ‘GDPR proofed’ your Credit Control Process?

    

   

   Data is at the heart of any credit control process. Regular readers know that we stress time after time the importance of having as much information as possible to inform your credit control methods.

   Our reliance on digital tools, search engines, electronic communications, online accounting systems and the data trail, means that the new GDPR legislation will affect the way we work. Therefore actions are required to safeguard ourselves and our clients against the potential impacts.

    

    

   What is this GDPR ?

   GDPR is the General Data Protection Regulation. It is EU legislation, due for implementation in May 2018. This legislation is an enhancement to existing data protection legislation and its intention is to bring the rules up to date for the modern on-line environment.

    

   What do I need to do ?

   You know us at Corp & Comm, we like to illustrate in nice easy steps how to implement any advice, action or guidance. So find below a useful guide summarising what action to take.

    

    

   12 Next Steps for your Credit Control Process

    

   1.Be Aware – Make sure your credit team are aware of the rules and regulations. Don’t give any debtor an opportunity to evade payment, by quoting legislation that is not understood.

    

   2.Be Compliant – Create a document to confirm what personal data you hold, where it came from and who you share it with. You may need to organise an information audit.

    

   3.Communicate properly – Review your current privacy notices and put a plan in place for making any necessary changes in time for GDPR implementation.

    

   4.Individuals’ rights – Check your procedures to ensure they cover an individual’s rights. How can you cope in a debt matter, should you receive a request to delete personal data ?

    

   5.Subject access requests – Update your procedures and plans to ensure you have the ability to provide the appropriate account information within the new timescales put forward.

    

   6.Processing personal data – Identify how in Law you are allowed to process the information you hold for collections purposes, document it and update your privacy notice to explain it.

    

   7. Ensure consent – Seek to review, record and manage consent of customer’s information. Refresh any existing consents to ensure they allow for effective collections contact.

    

   8.Children – In some industries, for example childcare and dentistry, you may need systems in place to verify individuals’ ages and to obtain parental or guardian consent for any data processing activity.

    

   9.Cover data breaches – You should make sure you have the right procedures in place to initially manage, then detect, report and investigate any personal data breach.

    

   10.Data protection impact assessments – Familiarise yourself with all codes of practice and work out how and when to implement them in your credit control process.

    

   11.Data protection officers – Someone within your credit control should take responsibility for data protection compliance. This is best to be someone who deals with the day to day process.

    

   12. International actions – If your organisation operates in more than one EU member state, have you thought as to what additional data protection guidelines you may need to follow.

    

    

   (More on 12 Next Steps can be found here on the ICO site)

    

   The final question has to be… Are you taking action for your Credit Control Process?

    

   Be ready, be informed and be prepared. Please feel free to contact us to discuss how to become compliant, we’re always there to offer advice and guidance.

4. 5 Minute ‘Improve my CashFlow’ Challenge

   January 17, 2018 10:48 pm Leave a Comment

    

   Ask yourself these questions, then challenge yourself to take action to improve your Credit Control and CashFlow

    

    

   Time

   • Am I spending too much time on monitoring and chasing payment?

   YES / NO

   • Would my time be better spent on other business priorities, that would bring cash into the business?

   YES / NO

    

   Team

   • Are potential CashFlow problems due to a lack of Credit Control team/skills?

   YES / NO

   • Do I need more resources to ensure my cash is collected, if my growth plans come to fruition?

   YES / NO

    

   Money

   • Am I worrying about making the call, sending the email etc to ask for MY money. Will this effect my CashFlow?

   YES / NO

   • Am I worried  that I may offend and then loose a contract/client?

   YES / NO

    

   Results

   Hopefully those questions made you take 5 to consider how you can have a more successful Credit Control process and improve the company CashFlow.

    

   If you have lots of YES answers to the questions above then our advice would be to carry out a review of your Credit Control processes. Check out our Blogs>>> for guidance on implementing a successful Credit Control process

   Finally

   • Should I be looking at options to outsource my Credit Control to improve CashFlow?

   YES / NO

   If you answered yes, please get in touch it is often more cost effective than you think.

   Email: info@corpandcomm.com

   Tel: 01535 654 594

5. ‘They’ll pay me, I’m sure, they’re too big to go bust’…

   9:57 pm Leave a Comment

    

   The catastrophic collapse of Carillion has led to fingers being pointed in every direction to apportion blame. However we at Corp & Comm take a different approach. The key issue here is what we can learn from the debacle.
   

   
   To be frank, the failing has been on the cards for a while, the indicators were there, they just weren’t taken notice of.
   

    

   In a recent survey, Sage claimed that over 80% of businesses had suffered some form of late payment, with a staggering 9% of business simply writing off the debt. When pushed on these findings in a recent interview on BBC Breakfast, Sage UK MD Alan Laing believed it may well be because the perception is pursuing debts was too expensive.

    

   Let us provide you some free advice that you can incorporate into your existing credit control procedures so that you can best make use of credit indicators to ensure you don’t suffer at the hands of ‘the next Carillion.’
   

   
   1. Review your credit limits. Are your customers above the agreed rates ?

   • You’ve agreed credit limits. If you’re now supplying more and still not being paid, this is an indicator that the debtor may be over-trading, as they’re doing more business but not generating cash-flow to pay debts.

    

   2. Do your diligence. When did you last credit check your customers ?

   • Carillion informed ‘The City’ of a profit warning but yet continued to be supplied. Any adverse profit/credit information shows either a downturn in trading or a change in the financial workings of the debtor. Either serve as a warning.

    

   3. Have a plan. Review your method of recovering your monies ?

   • Carillion’s creditors may have had the mind-set that they can’t go bust, they’re too big. This is clearly not true. No matter whom the debtor is, you have to treat them all equally. They’re still a debtor, irrespective of whether they owe you more. Don’t be scared to ask for it before it’s too late !

    

   Unbeknown to Alan Laing, pursuing debts does not need to be expensive. In fact our clients state we’re very cost effective. Indeed, we often give things away for free just for the fun of it !

    

   Take a look at our 10 Commandments for Successful Credit Control for everyday actions you can take to improve Credit Control and Cashflow.

    

6. Are you ready for the ‘Cash Flow’ Grinch?

   September 13, 2017 2:30 pm Leave a Comment

   September, a time for swapping stories about our Summer hols, then suddenly the Corp & Comm ‘Cash Flow’ Grinch reminds us that it’s only one more quarter until the dreaded ‘C’ word.

   ‘What’s Chrimbo got to so with credit control ?’ we hear you ask.

   September in the Credit Control department is all about getting your diligence done to set yourself up for a stress free Christmas.

   Most people’s payment terms dictate September’s invoices will become due at the end of October and October’s at the end of November, so it is the invoices that you raise imminently that will be your Christmas cash flow.

   Step 1 – Do the extra diligence checks on both any new customers and indeed any existing customers that have passed a big order.

   • Secure up to date credit checks and take some time investigate customers through search engines. You need to know any adverse business news about the company you’re entrusting your cash flow with.

    

   Step 2 –  Take extra care to ensure the info you put on your invoice is correct.

   • If anything is wrong with the invoice it may only come to light once you are chasing it, which may be once the holiday season is starting to bite.

   Step 3 – Take some time to speak with your customers purchase ledger clerks.

   • Business is all about building good relationships. You’re more likely to get paid in the Christmas rush when a customer likes you.

    

   GOLDEN TIP – Ask them when they are off for Christmas ? You need to know when they’ll be around when it comes to asking them to pay your invoice.

    

   Follow these simple tips throughout September and October and you’ll already be one step ahead when it comes to enjoying the holiday season.

    

   Corporate & Commercial – Here to make sure you’re Christmas is all Dough-Dough-Dough !

   Find many more credit control hints and tips in our other blogs

7. Are you using the Best Accounts Package for your Business?

   August 17, 2017 12:12 pm Leave a Comment

    

   

    

   Every day, as we run our client’s credit control functions, we remotely access many different accounts systems. As a result, we feel that we’re well suited to pass on our opinions about which accounts systems work best and why. There are many different accounting systems in the marketplace such as Harvest, Kashflow, Wave etc and all are unique and all fulfil a purpose. However for the sake of ease and security in your business, we would recommend you look at one of the big three providers Sage, Quickbooks and Xero.

    

   In our opinion, a good accounts package should complete the minimum of 3 things :

    

   * Allow the process of raising invoices on a daily basis, to either one individual client or a number of clients in a run, with furthermore the ability to be able to email both the original invoices and copies thereafter at any given time.

    

   * Allow you to create a statement of accounts for an individual client, with no barriers as to the dates, values or numbers of transactions to be listed within that statement, which again can be emailed at any given time.

    

   * Have the ability to raise management information reports, to highlight what monies are owed to you by a particular client and from where, with a view to creating a process for the pursuit and recovery of your outstanding monies.There are many other functions that a business owner could deem equally as important to them, this is for the purpose of successful credit control.

    

   Sage is the oldest player in the market and has a well established name within the accounting industry but this may well be its only downfall. Although Sage are working constantly to improve its ‘user friendliness’, in our opinion Sage is great if you have a good grasp of accounts, if you are a complete novice then Sage may not be the best introduction to accounting software.

    

   Quickbooks has also been around for a while but was a little slow in developing the on-line element of accounting. They are more than making up for this now and their advertising presence has increased dramatically over the last few years. However in our opinion although Quickbooks are nearly there with the customer ‘interface experience’ there is still work to be done.

    

   In our opinion Xero is the best starter package for a business looking to gain control of its accounts and its credit control function. Whereas we think Sage suits accounts people with a grasp of business, we think the opposite with Xero, it suits business people who need to gain a better understanding of accounts. Because of this we think it suits the ‘masses’ more.

    

   Furthermore Gavin McBride Director of Smith McBride Chartered Accountants and Tax Consultants share our view:

    

    

   

    “As a practice we have had experience with most if not all of the bookkeeping software on the market. Xero is our preferred choice for our clients to use. The main reason being that they find it easy and logical to use. Xero can really help a business owner to run a much more efficient business and keep track of who owes them money! It can also help them to keep a handle on how much money they are or are not make day to day”.

    

    

8. Why are People Choosing to Outsource Credit Control & Debt Recovery?

   August 4, 2017 4:59 pm Leave a Comment

    

   Last week our final article in a series of three, that looked at the key reasons to outsource your Credit Control and Debt Recovery was published by BBP Media, in The North West Business Post.

    

   Previously we had focused on ‘Time’ and ‘Team’, this article looked at ‘Money’. It was particularly well timed as just before we submitted our final article,  I had a very timely reminder from a valued client about exactly why successful Credit Control is important.

    

   …Upon hearing that we had successfully recovered several thousand pounds in outstanding debt as part of their overall Credit Control  he said,

   “I can’t thank you enough, I can take the family on holiday now.”…

    

   That is the very real and life effecting impact that outstanding debt or unsuccessful Credit Control has on Small Business.

    

   So I really hope that our Articles, Blogs or services can help you to have a Successful Credit Control Process.

   

   You can find our other articles in this series on our Blog :

    

   Links to published articles below:

   Article 1 -Time      – (Mar. 2017) Page 14 
   Article 2 -Team     – (May 2017) Page 7    
   Article 3 – Money  –  (July 2017) Page 6    

    

9. The Ten Commandments of Successful Credit Control

   July 13, 2017 12:24 pm Leave a Comment

    

   The Ten Commandments:

   Our aim with this blog is to provide a series of easy to remember rules, within a common sense process that will enable you to successfully manage your Credit Control and ultimately improve Cash-Flow.

    

   1. Treat Every Customer as a potential Debtor

   Like you, we like to think the best about people and none of us want to turn potential business away. All we are advising is, be aware of who you are dealing with, people and businesses are not always what they first seem. Remember this guy? Arnie, a nice all American college kid………then he morphed into a wolf..!

    

   

    

   Sadly we have seen this play out many times for clients, ” He was really nice, we had a great professional relationship but then when we sought final payment he was like a different person”..

    

   It’s not always obvious either, big names are often enticing as we strive to grow. Who would have predicted the fall of household names like

   

    

    

   2. Get an Account Opening Form

   The more information you have, the more you can react with if needed. Take time to ensure you have captured the individual and business names, addresses, contact and account numbers etc. That way if you find yourself in a payment dispute situation at least you will have the information needed to move forward.

    

   Here is an example of an account opening form for your reference:-

   

   3. Do your due Diligence

   Not just on your new customers but check your existing customers too on a regular basis (at least,quarterly).

   Access tools to help such as:

   • Experian
   • Equifax
   • Creditsafe

   Do your background checks using websites e.g:

   – www.companieshouse.gov.uk/beta

   – www.biz.gov.uk/insolvency

   – www.thegazette.co.uk

   Example:

   

    

   4.Check the purchase order

   Always check any purchase order, to make sure they match the company you have an account for. Make sure the dates, volumes, costs etc are accurate to avoid misunderstandings and a reason to delay payment.

    

   5. Send an order acknowledgement

   After receiving an order, send your own acknowledgement confirming the particulars of the sale. Again this allows clarification for all parties and avoids an reason for delayed payment.

    

   6. Invoice promptly and correctly

   Invoices must be sent on time with :

   •         Today’s date,
   •         Due date,
   •         Invoice details,
   •         Amount
   •         Bank account listed.

    

   7. Send a pre due email

   Send a gentle reminder email a few days before the invoice is due, to identify any issues. This way if issues exist you still have time to address them ahead of the payment date.

    

   8.Be prepared

   The customer may ring to discuss, don’t be put off by the debtor it’s your money, ask for it !

   Here are our suggestions for being P.E.R.F.E.C.T when asking for what you are owed:

   • PREPARATION
     • Have your call script to hand so to be both concise and professional.
   • ENTHUSIASM
     • Be bright and alert. Nobody wants to talk to a grump.
   • REALISM
     • Ask yourself if the debtor can meet your request or will you need to negotiate.
   • FOCUS
     • Don’t go off track. You’ve called to ask for your money so ASK FOR IT !.
   • EMPATHY
     • Although you need to be firm, you must also understand the debtor’s position.
   • CONNECT
     • Try to form a bond with the customer, they’ll be more likely to resolve your claim.
   • THE OUTCOME.
     • Always remember why you’ve rung, you need your money so make this your goal.

    

   9. Have a letter of claim

   In order to chase an overdue account further, you must have sent a letter of claim that adheres to Court Pre-Action Protocol.

   Your letter of claim must include :

   • Reference to contract
   • Breakdown of the account
   • Details of claim
   • Date for payment

   Check out our Pre Action Protocol Blog>>>

   10. Have an exit strategy

   Have a clear plan as to what to do next…how are you going to recover your monies and who is going to do it ?

    

   Our Philosophy      

   A Pound of Prevention  

   is Worth an Ounce of any Cure.

    

   If you would like to discuss your current Credit Control process with a view to understanding how you can improve it or if you should be outsourcing it please get in touch.01535 654 594 or info@corpandcomm.com

    

    

10. Uneasy Asking for Payment? – Here is our Advice, be P.E.R.F.E.C.T !

    July 12, 2017 12:54 pm Leave a Comment

    Many business owners delay prompt debt collection in the vague belief that either, the customer will eventually pay, they find the whole process of chasing debtors uncomfortable or they don’t want to alienate valued customers. Worse still, some business owners fear bringing in an outside agency in the misguided belief that the process will be intrusive and detrimental to the client relationship.

     

    The most important piece of advice that we give to any client when it comes to Money is…It’s your money, don’t be scared to ask for payment!

     

    Here are our suggestions for being P.E.R.F.E.C.T when asking for what you are owed:

     

    • PREPARATION
      • Have your call script to hand so to be both concise and professional.
    • ENTHUSIASM
      • Be bright and alert. Nobody wants to talk to a grump.
    • REALISM
      • Ask yourself if the debtor can meet your request or will you need to negotiate.
    • FOCUS
      • Don’t go off track. You’ve called to ask for your money so ASK FOR IT !.
    • EMPATHY
      • Although you need to be firm, you must also understand the debtor’s position.
    • CONNECT
      • Try to form a bond with the customer, they’ll be more likely to resolve your claim.
    • THE OUTCOME.
      • Always remember why you’ve rung, you need your money so make this your goal.

     

    Action is the key, as our clients testify :

    “When Rob first mentioned his Credit Control service…it sounded too good to be true.
    I had a list of customers who needed constant prompting to pay their invoices, but I didn’t have enough time to contact them all and still get on with my main workload.
    Rob and his team now carefully and expertly look after my customers and encourage prompt payment of their invoices. Having them look after my business income, means I’m free to focus on the part of the business I really enjoy. Almost immediately, the turn-around in my finances helped rescue my cash flow and keep both the bank manager and my wife happy.”

    Neil, Thornton Directory.

     

    Of course if you would rather outsource your Credit Control or Debt Recovery, check out the rest of our website  Click Here>

    Alternatively call us on: 01535 654 594