Very few small businesses have a dedicated credit controller; such luxuries tend to be the domain of the larger business where credit control is undertaken, almost “at arm’s length”, and where the controller is given the list of delinquent debtors to deal with once they have gone beyond agreed terms.
The benefit is that the credit controller can stand aside from any personal relationship with the customer, yet can develop a good relationship with them albeit “one step removed” on a highly professional basis linked to a single theme – “Can you tell me why you haven’t paid and when you intend to do so?” Nothing else need cloud the matter.
A good credit controller needs to be polite and professional – but single minded and entirely objective ….. which is very different from where the owner manager and/or another member of staff (often a relative) seeks to get paid. They are often too close to the business and the customer to remain objective, often allowing themselves to be strung along by the promise of “the next big job!”!
A good credit controller does not come cheap and they need to be fully occupied to justify the expense; if only you could have “half of one!” That, then, is the beauty of outsourcing to a Credit Control Company where you can change, what would be a substantial fixed cost, to a variable one, linked to the volume of customers and the work required. You can pass a selection of clients over or, as is often the case, those customers who are regularly taking longer than is acceptable to pay.
Paying on time used to be a matter of pride but such has now become a means to get interest free credit from suppliers. If you consider a supermarket that “sells for cash” and takes, often 60 days credit, it can use such cash to finance the business; indeed larger chains have been able to build new stores on the pay of perpetually favourable credit terms.
CRS has a client who has a ledger of over 300 debtors – of which around 25% are “taking advantage” at any one time which, from experience is around the norm. When we took on the job this was around 35% which was, of course, unacceptable.
To summarise why our credit control service is important: