7 Reasons to outsource your credit control

7 Reasons to outsource credit control

Time restraints in a busy business often means credit control gets left by the wayside. Credit control is not just for “big businesses” and sometimes simply not understanding the importance of it, until it is too late, leaves a business struggling financially. Hiring a company to outsource credit control to has become extremely popular over the last few years. Especially those who need to know when they are going to get paid and need a consistent cash flow.

Outsourced credit control, when done correctly will free up time, improve your cash flow and is a cost-effective solution in comparison to hiring a new member of staff.

The benefits of outsourced credit control

1. Improved cash flow

This is perhaps the best benefit of outsourced credit control. Without a healthy cash flow and without knowing when payments are due, your company can’t run effectively. Credit controllers aim to ensure your money is collected within your payment terms.

2. Cost-Saving

How?
Employing an in-house credit controller can cost £22,000+ a year. You also have sick days and annual leave to contend with. Will they be good enough? How difficult will it be to find and hire someone else if it doesn’t work out?

Using a valuable member of staff to chase payments is also costly due to time constraints. This is because adding an extra job role to their daily duties may result in tasks not being completed on time. By not formalising your collection process, you are leaving customers to pay when they want to.

When you use an external company for credit control, who can act as part of yours, it’s like having your own credit controller, but without the desk space being taken up. Depending on how many customers and invoices you send per month, you may only require just a few hours to keep your cash flow on track.

3. Expertise

When dealing with your money and cash flow, you want to make sure that you have the best people looking after it. A great track record and experience in the industry is a must. A professional customer focused attitude is also key.

A company who offer ‘virtual credit control services’ will be able to start right away and have the experienced members of staff in place already. Their staff will focus solely on this task and deliver the best results for your business.

4. Process

Professional credit management companies have bespoke, formalised monthly procedures to follow, which proactively reminds your customers to pay on time. These procedures can include letter cycles, proactive calls, query management and customer credit monitoring.

5. Aged Debt Recovery

Despite your best attempts you are going to have some customers who will not pay you on time. Sometimes the only option is to follow the formal debt recovery steps, (which now includes ensuring you comply with Pre-Action Protocols), right through to Legal Action.

A good credit management company will work through and recover your aged debt too. They will assist you through the Small Claims process, and they will make it stress free.

6. Less stress

A company with the experience to take the strain of collecting your money will reduce your stress levels and your to do list! You are free to look after customers, oversee the business, obtain sales and think.

The credit control company will advise you on credit worthiness of new customers, what risk they might bring to your business and what payment terms you should allow the customer to have.

This will take away any stress or worry about that customer potentially not paying you on time.

7. Your brand in-tact

Companies have different visions, missions and objectives, however, they all have similar needs to maintain their business success.

A good credit management company will always represent the company they are working for in a professional and friendly manner. They will base their own credit control processes around their customers company’s values and objectives.

Therefore, having a professional company dedicated to looking after your credit control is a great benefit to your business.

If you would like to know more, contact us and we will be more than happy to help you.