Importance of a Good Credit Control

Importance of a Good Credit Control

What Is Credit Control?

Credit control is a system within your company that reduces the risk of unpaid invoices by only granting credit to customers who are able and likely to pay. It Reduces bad debt, increases cash flow, and improves credit terms with suppliers.

Overall, credit control ensures that your company does not accumulate unpaid invoices that must be pursued.

Why Is Credit Control Important?

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Cash Flow Issues Time Consumption Bad Debt Know Your Customer

Cash Flow Issues Late and poorly managed payments can quickly lead to cash flow issues.

When cash flow is obstructed, businesses are sometimes forced to take drastic measures to keep operations running smoothly. For some businesses, this may even imply that a salary cut is necessary.

Time Consumption Inefficiency and wasted hours are the most common problems caused by credit control issues. It takes a long time to deal with unpaid invoices, send out reminders, and go through the debt collection process, but with CreditQ, you don't have to take stress for these kinds of issues. You can get facilities to check complete business credit report with easy steps.

Bad Debt

If your debt collection procedures are not effectively managed, it may give clients a negative impression of your company.

Strong business relationships cannot be sustained in this way. And in the worst instance, it could just be necessary to write off some debt or file a lawsuit to collect it.

Your company will ultimately be less profitable in either of these two situations.

Know Your Customer The first step in ensuring a successful relationship is to be clear about the exact name and legal status of the business/individual you are supplying. You won't be able to check if they are suitable for the amount of credit you need to grant them. You won't be able to invoice them correctly. You won't be able to start legal action effectively if you don't know who you're trading with.

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