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Is your credit control efficient?

I had an interesting experience recently which highlighted, whilst automation is very efficient, it fails to recognise technology can fail sometimes, therefore, it should NEVER be relied on completely, nor should we ever forget the human element in our business.

Businessman Assisting Couple with Credit Cards

Credit control is a crucial arm of a business

Like any process in a business, it must be efficient. Fortunately, it is a task that can be automated but we must never remove the human element. It should also be done professionally and respectfully.

Automation must have a check

In short, my internet was cut off as I owed £16 to my utilities provider and had cancelled a direct debit. This automatic response in theory seems almost reasonable, but it failed on so many levels.

Only once I’d phoned their customer service team were they able to bring up my notes, and see the reason for stopping the direct debit (it was them that told me to do it…) and why I had not paid the £16 (their online payment system has crashed last week and I had contacted them about it).

sewing machine being checkedIf the automation had a human element asking why haven’t hasn’t the customer paid the bill, it could have saved time and money. Also, let’s be honest, how many of us just want a easy stress-free life? Why complicate things more than they have to be…

If you’re going to inconvenience someone, give them warning

I had received no warning that I would be cut off. When I called they told me I should have received a text or an email. I told them I didn’t. What ever happened to a phone call or a letter?

Again, technology has aided our ability to talk to people easily and quickly, but we must consider the possibility of texts not getting through (I’ve lost count of how many times someone has said they’ve text’d me when I haven’t received it). Plus emails can go to spam, or simply get lost. It does happen. I’ve experienced it from both sides.

Be realistic

If you invoice someone, how long is reasonable to pay their bills. In my job as accountant, I have seen credit terms vary between 7 days and 90 days, however I’d say the average is 30 days. (Yesterday was the 30th day thus in my opinion I was still within the average terms).

Furthermore, if someone hasn’t paid a bill in 30 days, that’s when the credit control letters, emails, texts and calls should start. It can be useful to remind people prior to the date it is due but the ‘heavy demands’ should not start until they have been given a reasonable time to pay.

Be understanding

Tradesman and businessman
 

Cutting off anyone’s internet at the best of time would be an inconvenience.  However, as we’re still in lockdown in Scotland with the majority still working from home, having no internet for almost a full day meant I couldn’t work, nor could my partner. That was a major disruption for me, and my partner’s employer. If you’re going to stop the service you provide to your customer, ensure it doesn’t disrupt their lives too much, or they will be seriously p****d off. Yes they’ll pay your bill, but you’re going to lose them as a customer.

Maybe you don’t want them as a customer though which is ok, but let them go professionally. People do talk and bad news travels very fast. Personally, I’m waiting on a formal apology plus compensation for their error, but if I don’t get that I will ‘name and shame’ them’.

Put it all in context

Whilst there was nothing else going on for me, other than being busy, we’re just coming out a global pandemic. If someone is not responding to your emails or texts, maybe have a think as to what may be going on for them. Have they been ill themselves? Has a member of their family been ill, or died?

Until next week, take care and if you need any help with your credit control, please get in touch to see if we could help you streamline your processes whilst maintaining the personal touch.

Helen Monaghan

Chartered Management Accountant and Author of The Magical Mix of Money & TaxSuccessful Business Minds, and 12 Steps to Improve Your Cashflow.

© HM Finance Coaching Ltd

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