Monday, September 19, 2016

Credit Control: Do you know who you are dealing with? Identifying the 'Can't Pay - Won't Pay'

Securing customers is a great milestone in business, but it all grinds to a halt if you can't get them to pay.  We invited local credit management expert Jean Clough to share her insight on how to keep money coming in, and how to seperate the 'will pay' from the 'can't pay, won't pay' crowd. Here are Jean's words of wisdom. 

Jean Clough, Credit Matters
OK, so you have put together “best practise” in your invoicing, credit control processes and procedures, but are you still at risk, and to what extent?

Behind every business is a person or people, do you know them?

Do you know who their customers are, and how effective is their own credit management?

So many businesses suffer a bad debt because their debtor has sustained one themselves and, being unable to trade through the loss, has ceased trading and created the domino effect.  If you have been a domino at some time, learn from the experience, don’t make it a mill stone around your neck, you have more important things to focus on, staying solvent yourself being the main one.

Then there are those who never intended to pay you from the outset, did you see that coming?

Those of us who pay our way through life, assume, wrongly sometimes, that others are the same, we judge by our own standards don’t we?  Yet the unscrupulous in society, who live by their wits, and prosper from fraud (in whatever guise) have no qualms about seeing your business go under, nor the personal impact of such a disaster. They simply don’t care.

Those bad debts hurt the most, knocking confidence in both yourself and your business, some people simply give up their dream, and that’s not acceptable to me and my business ethos.

Here are some key things to consider and warning signs to look out for that can save you stressful credit control situations in the future:

  • ·       Who posts cheques/bank receipts – can they identify anomalies? – has your customer suddenly changed identity?
  • ·       Part paid accounts – these can be a possible warning sign of cash flow problems
  • ·       Is your customer who they really purport to be – could you be caught up in money laundering?
  • ·       Leaving the debt too long to collect – could you be seen as a preferential Creditor? How do you feel about having to give that last receipt back?
  • ·       Is the workload to much for present staffing levels? Do they have the required skills to be effective?

·       Should you outsource, or bring in temporary staff
·       If your processes and procedures are not right, you will find yourself on the never ending circle of spending your profits due to poor controls or lack of staff training.  You firstly need to get your processes in place, and then ensure your staff are well versed in how to follow them through.  You might consider bringing an expert in to help you get everything in place. 

About Jean & Credit Matters
I offer a complete review of your business practise, bespoke to your sector, one size doesn’t fit all. I work alongside the business owner and their staff to put in place systems and procedures to protect you along the trading way. Empowerment is the name of the game here, and knowledge is a wonderfully empowering tool. It gives the person the confidence to tackle the most difficult of debtors, by knowing who they are dealing with.

I have used psychology in my credit management years to a great advantage, and have yet to meet a debtor who outwitted me. Because I make sure I know who I am dealing with
Even my own Clients!

Following good credit management practise along with the above, also puts you in a better position should you need to use the Legal route to obtain payment. A well presented case is more favourable to a Judge, than a lot of messy paperwork, and “he said, she said” arguments.  I offer first hour consultation free, and can provide a backup service bespoke to your needs
For more about Credit Matters visit or contact Jean for advice on 07951 265820.

Jean is one of the enterprise experts who frequent the Entrepreneurs Clinic at Liverpool Central Library Business and IP Centre, along with Ali McGrath from our Business Advice Team, Councillor Gary Millar and other key business brains.  If you have a business query you can take advantage of the clinic which runs a drop in session each Thursday 1-4pm for a free 15 minute consultation.  

If you are in the process of starting a business and want some extra advice on where to begin and what else you will need to consider, contact the Enterprise Hub team on 0151 706 8113 or 

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