How can The Credit Collections Company help me as an SME business?
“Our Credit Management service is designed to help SME’s to understand, how good Credit Control steps can help their business with not only their Cashflow, but to also help minimise the potential for bad debts “. Sheila Chadha, MD
Poor cashflow example
“I made 1 Million pounds in sales last year!” and you may say that’s great, but if you were to say, “I made 1 Million pounds in sales but only collected £100,000.00 last year”, alarm bells would go off. We would want to find out why there is such a large shortfall in your cash collections. The cost is a lot greater to your business than simply not having £900,000.00 in your bank. Not only are you losing on potential interest but you are financing this shortfall in your business in the form of overdraft and/or loans, not paying a supplier and so on.
What is Credit Management?
Credit Management is all about managing the life cycle of your Customer from beginning to end. This can vary from business to business but is not limited to the following:
- Credit vetting a potential new customer in line with your Companies risk profile.
- Onboarding the new client, ensuring your Accounting system is set up correctly and contracts, if applicable are signed.
- Ensuring invoices are produced correctly and statements are sent out on time, whilst ensuring cash is allocated accurately.
- Following up with clients to ensure invoices are paid on time, in line with credit policy but also ensuring disputes are resolved quickly.
- Last but not least, if a Customer defaults on payments, escalating the debt recovery process either in-house or to an external 3rd party.
The above has been simplified but takes a lot of thought, time and experience to ensure you do not end up in the debt recovery scenario. Good credit management is all about prevention rather than the cure. We put together a Plan A, but also a Plan B if elements of Plan A fail.
How can The Credit Collections Company help me?
Here at The Credit Collections Company, our focus is to help any sized business from a solopreneur, right up to a multi-million pound SME. We will listen to your problems and come up with a suitable Credit Management plan for you, that is affordable and cost-effective. We recognize that one size does not fit all and everyone’s problems are different.
You can hire us for as little as a few hours a week to give general advice, or some projects require a full-time approach. We will work with you, with whatever suits you best.
We offer a standalone Credit Vetting process, for businesses that would like to offer credit to their customers, but are unsure if it is safe to do so, without exposing your Company to a poor paying customer or worse a potential bad debt.Using Credit Agencies such as Experian or Credit Safe, we run thorough background checks on the Companies Directors as well as the Company itself. We use other databases to check for vital information to determine if a Customer could be a good, medium or high risk to your Business.
Need someone to clear backlogs of debt?
Some clients come to us and have a handful of invoices that are aged over 1 year plus. We can not only clear these up for you, whilst maintaining the customer relationship if there still is one, we will also advise on how to prevent future invoices not being paid.
Other clients come to us after they have 4, 10, or even 20 years’ worth of backlog of debts. This is through poor credit management and we see it time and time again, not just with small Companies, but major corporations too. You may even have a credit team in place, but sometimes they can be so overwhelmed, that they don’t even know where to begin. This is where we ‘The Fixers’ come in, also known as the ‘Credit Angels’.
We put together a whole strategy from the ground up and work out all the issues that are affecting your team, from poor collection techniques. to poor follow-ups on disputes, misallocated cash, and so on. We are not afraid to roll up our sleeves and wade in, as we believe we can identify a lot of key issues, by actually speaking to the customers ourselves. We are very methodical and we don’t leave a stone unturned.
Contrary to belief, business owners believe, the statute of limitations applies to all debts over 6 years and older. We have successfully recovered debts beyond this but it is subject to the nature of the problem, to begin with. So next time, think twice before writing off debts quickly. Want to find out more? Give us a call today and book a free consultation.