Fix your business’ credit control today

Help small businesses thrive. That’s our mantra here at Capital on Tap, and it’s driven our offering since day one. We were recently chatting to our friends at Chaser, the cloud credit control software, about 6 options you have when your business needs an urgent cash flow boost. They ended up giving us some fantastic insight into the mistakes many small businesses make with their credit control function, inhibiting their cash flow. As cash flow is the lifeblood of a business, we asked them how small businesses can most effectively combat these mistakes and establish a world-class credit control function.

Here are the 3 things your business needs to do today to fix its credit control function and get invoices paid on time.

1. Knowledge is power. Arm yourself.

If your business sells on payment terms, one of the biggest mistakes you can make is assuming each of your customers operates the same way. Avoid setting yourself up for excuses and late payments by asking these 4 questions every time you supply a new customer:

  • What information do you need to make payment? (Although your invoice should already include the following: payment details, accepted payment methods, payment terms, invoice date, your VAT or sales tax number, and the correct description and cost of the goods/services)
  • Does this purchase require you to approve a purchase order? (And if so, when will it be approved? Plus don’t forget to include the PO number on the invoice)
  • Who is responsible for making payment on this invoice? (And how do I contact them?)
  • When do you make your payment runs?

Armed with this information, you won’t be blindsided by your customer with excuses about not following procedure. They’ll be forced to justify the unjustifiable – why they haven’t paid you on time when you’ve done everything correctly.

2. Polite persistence pays. Chase consistently.

“Polite persistence pays” is a motto of Chaser’s, and it’s an incredibly effective philosophy to follow when conducting credit control. Chaser have seen that almost 80% of invoices can be collected on time through email chasing alone. Here’s what you need to be doing to maximise your effectiveness of email chasing.

Every email chaser you send needs the following information to be effective:

  • Your business name
  • Invoice reference number
  • Amount owed on the invoice
  • Payment due date
  • Number of overdue days (if invoice is overdue)
  • And always attach a copy invoice

In providing this info, you eliminate any chance of the customer using the excuse that you haven’t provided enough info for them to make payment.

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It’s important, however, that your email chasers always remain polite and are sent often enough to keep you front of mind in your customer, but without harassing them. To achieve this, a good rule of thumb is never chase more than once a week or less than once a fortnight. Armed with the knowledge you acquired earlier, send your chasers to the person responsible for making payment on the invoice, and consider timing these chasers with when the customer makes their payment runs for maximum chance of getting paid quickly.

While email is a very effective medium for chasing up unpaid invoices, don’t forget the phone. Especially if your customer is slow to respond or sends vague and unclear replies. A rule of thumb from the Chaser team is to make a call after every third email chaser.

And finally, once payment is received on the invoice, whether it was on time or not, always thank your customer for paying. You’ll positively enhance the relationship with your customer and help encourage timely payment in future. Just a quick one-sentence email is enough, but make sure you do it within the 24 hours after receiving payment for maximum effect.

3. Maintain your invoice communications history neatly.

While the above advice can work wonders on the efficacy of your credit control function, it can be undermined by the lack of a single source of truth. Without consolidated and well-maintained invoice communications histories, a world-class credit control function crumbles. Scrambling through sent emails, multiple inboxes, or notes scrawled on the back of an envelope are all unnecessary risks and time-wasters from the credit control of the past. If your business still manages its credit control function this way, it could easily be racking up hours wasted every week. Not to mention operating with the unnecessary risk of missing key info when it isn’t consolidated into one location.

Whenever you’re conducting credit control with an incomplete picture of the situation, you’re inviting your customers to delay payment. You also risk damaging your business’ reputation by providing conflicting info, having to backtrack on something you mistakenly said earlier, or simply creating the image of a “pushover” company.

Keep a centralised log of all chasers sent, replies received, phone calls taken, and notes made. Make sure it is easily navigated and searchable by customer, invoice, and date. This will not only save your business a world of time, it will empower you to deliver world-class credit control and get your invoices paid on time.

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Chaser is cloud credit control software to get your invoices paid on time, in less time. Their average customer saves 7.3 hours a week on credit control, and boosts their cash flow by £4,400 per £100,000 of turnover. Check out how their product can help your business today.

Meet Nik from the Ops Team!

Today we chat to our Operations Manager Nik, who joined Capital on Tap back in 2014 and is now in charge of the team at the heart of the company. The Operations Team deal with all customers’ queries and feedback, but also work closely with all other departments within the business to ensure our processes are of the highest quality available in the industry.

Hi Nik, can you tell us how you began a career at Capital on Tap?

I was straight out of university and I was looking for an opportunity to work somewhere that is challenging, fast paced and where you learn a lot while working rather than a bureaucratic or very corporate environment. I started as an underwriter for a couple of years and then wanted to progress further – I was always keen on leading a team to gain that experience of being able to pass skills and knowledge onto other people and help them develop their own careers.

You’ve been here since almost the very beginning, what would you say is the one thing you love the most about working at Capital on Tap?

I think it’s the fact that it is up to you what you make of it: what you put in you will get out. It has an environment for people to excel at what they do, and it will reward that by creating opportunities and incredible learning and responsibilities that you may not get anywhere else.

And what would you say has been the most challenging moment in your career so far?

I would say leading the operations team. They are an incredible and hardworking team and have benefited from an outstanding support culture from previous managers such as Zoe in the past. It has been an incredibly steep learning curve to gain their respect and use it to drive them forward to create value for themselves and the company. But I gladly volunteered, even though it was combined with a lot of long hours and uncertainty in the beginning, I feel I’ve touched ground again and established my daily routine.

Talking about a daily routine, how would you describe a typical week working at Capital on Tap?

There is no such thing as a typical week! You make a plan and realise ten minutes later that it is entirely out of date because everything has changed since you last looked at it. Our IT team are working at a crazy pace, sometimes it’s overwhelming how fast they work. You can have targets and goals, but even those constantly evolve as you progress and technology pushes the boundaries of what was previously within the imagination. A typical week is knowing that everything always changes, and that’s what makes it exciting and challenging.

What advice do you wish you had been given before starting at Capital on Tap?

Trust your instincts! There is no manual to tell you how things are supposed to be done or how to build a new project. People that excel here are the people that make decisions every day on something they aren’t entirely sure about because it hasn’t been done before. Because the hierarchy here is so flat and everyone values everyone else’s opinion, stakeholders always welcome being challenged on their ideas, and that keeps things evolving on a daily basis, which is something that’s very healthy for a business to have. The big learning is to make it up as you go along and do so while being responsible and accountable for your actions. Also try and get it right more often than not, ha!

 

What makes a perfect operator in your eyes?

The perfect operator is someone who, with every customer interaction – be it on the phone, via email or online chat – understands that there is a way to fulfil a customer’s needs. There’s always a way to deliver great results. Boundaries can be pushed, processes aren’t necessarily perfect, and a great operator has to always think outside the box to resolve any issues and create the best outcome for the customer and the business.

Finally, how would you describe the social aspect of the office? Is it all work and no play?

No one does not take the time to socialise at Capital on Tap. It’s just incredible how you can talk to everyone, grab a pint with people after work, chat or play football. It really is the perfect environment to meet great people who become friends, and it’s fantastic to have a workplace that encourages social activities.

Interested in a career at Capital on Tap? 

Join us!