Cpcmcredit Blog

I still advise and assist clients but for day to day credit management, I refer to an excellent agency who have proved to be very effective with a number of my clients

Why are they effective?

Its not because they are aggressive “debt chasers”. Only the terminally naive believe that this is what credit control represents. The key is their experience and ability to engage with clients as well as knowing exactly when to take the required next steps. Thats an art that comes from experience and its a judgement which if made wrongly, can have consequences

Enforcing collection of a debt is not easy, as anyone with knowledge of the insolvency laws and small claims courts will verify. Thats not at all a criticism of the UK legal system in relation to debtors , which is one of the best in the world (try the USA or Italy) but just a simple understanding of the dynamics. It is also why credit assessment is so vital which in turn, requires a degree of serious attention and not just a cheap agency report.

Another crucial area is the resolution of queries. In truth, most debtors would rather pay the accounts than have a dispute hanging around and this is why query prompt civil and engaging query resolution is vital not just for cash flow but also for client relationships. Leaving unanswered disputes unanswered for weeks or even months simply leads the debtor to, quite rightly, assume a lack of interest or a simple lack of organisation. Hardly conducive to business development

Also there is a shockingly naive tendency by some to assume that queries can be bullied away by threats. Ive seen this and its madness

And you can’t cut corners with credit control. Dumping the task on a reluctant employee (usually junior financial staff who really are the very worst candidates due to their introverted nature) is pointless. It simply doesn’t work.

Good relationships with debtors are vital. My introduction to Credit control was through the best man manager I ever worked for and his motto was always “the customer is king”.

There is much more to consider but these are my thoughts for now having seen recent examples which are disturbing.

There are two significant factors that bring businesses to the brink of collapse. One is cashflow and the other is loss of clients.

Need I say more?