Owning a business comes with many factors that you need to keep in-check. This is to ensure it’s operating as smoothly and efficiently as possible. One key element you need to consider is payment from your customers. What should you do if your customer is behind with payments, or they can’t pay you at all?
Here is an overview on the importance of credit control, along with the ways it can help you to try and prevent such circumstances, or at least handle them if they occur.
The importance of credit control
Cash flow is essentially the lifeline of any business, and without the needed resources, your business can’t continue to run or expand. Credit control ensures that your business is receiving efficient funds by monitoring payment activity via customers. Credit control also helps you recognise when to take appropriate action against delayed payments or payments that aren’t received at all. This will improve the cash flow of your business and prevent financial issues from arising.
- Payment deadline on Invoices
By adding a clear payment deadline on invoices, there should be no confusion from either party’s point of view of when payment should be received. Typically, most businesses allow a period of 30 days to receive payment from their customers. It’s advised to send reminders of payment to your customers on the lead-up to the invoice deadline. If payment still hasn’t been received, you’re intitled to take further action via legal proceedings.
- Late payment fees
Introducing late payment fees will prompt customers to pay you efficiently and will deter them from potentially facing a fine! If this isn’t enough to prevent customers from paying too late, the additional fee is in place to compensate for the time and resources you have spent on chasing payments through.
- Take payments in advance
If you feel there’s the possibility that your customer is unable to pay you when anticipated, taking payments in advance is another way of preventing likely problems. Whether it’s a deposit or the full amount, you are protected from having your time wasted.
- Retain a healthy rapport with your customers
It’s important to maintain a good relationship with your customers, whether they’re returning customers or new. You don’t want your credit control system to invoke a negative stigma whenever payment is discussed. It’s essential to assure them that this is simply part of your business, and your priority is delivering them quality service, especially when it comes to their beloved pets!
As well as providing quality cover for pet businesses, we’re here to offer you advice, should you need it. Please contact us today to speak to one of our team members, we’re always happy to help!