An Introduction to Credit Control
- Price: £3.60
- Published: November 2016
- Type: Business Information Factsheet
- Format: PDF
When a business supplies goods or services to its trade customers without being paid for them in advance or on receipt of those goods or services, the business is offering its customers 'credit'. Credit control is a vital part of the ongoing financial management of a business as it maintains cash flow by ensuring that it receives payment from customers as quickly as possible.
Poor credit control leads to cash being tied up in sales made to customers who do not pay on time, either because they do not realise payment is due, they are waiting until they are reminded to pay, or they are simply unable to pay. A business will suffer if its customers do not pay on time as it may be unable to pay its own suppliers and staff if it has insufficient cash in the bank.
This factsheet explains how to set up a credit control system. It also briefly covers how to recover debt, the option of factoring as a method for improving cash flow, and considerations for credit control when exporting goods and services.