'Getting the money you’re owed' is also known as Credit Control. When we first start out we don’t have many processes. We send out invoices and hope for the best. However, only about half of invoices are paid on time, so that's not a sustainable policy. If you're sending 10 or more invoices a month, it's probably time to develop a credit control process.

Contact our team at Blackburn Accounting to help you to get on top of the credit control TODAY

9 Credit control mistakes to avoid

1. Slow invoicing
Send invoices as soon as you can. Immediately after delivering the product or service is the best time. That’s when your customer is feeling the most goodwill and will be most receptive to paying. The second best time to send an invoice is right now, so get busy. Customers simply can’t pay what they haven’t been invoiced.

2. Shying away from the phone
When the due date’s up, it’s up. Tell your customer they’re late. Chaser has found that 80% of unpaid invoices can be collected through email chasing alone, so start there. But when that isn’t enough, pick up the phone.
Customers find it harder to justify late payment when you have them on the line. And if there are issues to sort out, you can discuss them in real time instead of spending a few more days emailing back and forth.

3. Unclear payment terms

Spell out how long your customer has to pay you, and identify any late fees. Put these in a condition of sale document and get your customer to sign it (physically or digitally) before you start doing business. That way customers can’t use confusion or misunderstanding as a defence for late payment.

4. Assuming all clients are the same

It doesn’t matter if you have 99 customers who all process your invoices the same way, the 100th could be different. And if you don’t send the invoice just how they like it, you may not get paid. Whenever you land a new customer, always ask:
• who do I talk to about invoices getting paid?
• what information has to go on the invoice for it to get paid?
• when do you do payment runs?
With this information at hand, you’ll never waste time sending an invoice that simply can’t be paid, or chasing the wrong person when it’s past due.

5. Rolling over

Late payment is very common. It can be tempting to give in and accept it as part of life. But don’t. Review outstanding invoices regularly. Highlight the ones that are the furthest overdue, and the ones that are worth the most. Make a plan to get them sorted out.
Speak with the customer and consider things like offering different payment methods, giving early-payment incentives, or changing the credit terms. You have lots of options. Don’t worry if your first few strategies don’t work. Every customer and every invoice is unique. The only way to fail is to give up trying.

6. Making (empty) threats
Some customers always pay late. If you’ve had enough, you might decide to charge late fees and interest, stop supplying goods or services till they pay, send out debt collectors, or take them to court.
These are serious moves and your customer may react by taking their business elsewhere. Don’t make threats lightly. But if you do make a threat, follow through. An empty threat gets you nowhere. The customer won’t take you seriously again, and you could be stuck with late payment forever.

7. Forgetting your teammates
Late payment might be the finance team’s responsibility, but others can help. Tell sales staff and account managers when their customers’ accounts are overdue. They might be able to leverage their relationship to get an invoice paid. Or they might make new sales deals contingent on old invoices being settled.

8. Not thanking for payment
Say thanks when a customer pays, whether they were on time or not. These positive messages strengthen the relationship and actually increase the speed of future payments.
It takes no time to send a positive email. Work it into your credit control process. Just ensure it’s sent within 24 hours of payment to keep it relevant and genuine.

9. Not using the right tools
Once you’re issuing 10 or more invoices per month, credit control gets complex. There are lots of emails, phone calls, and handwritten notes floating around. Some information gets stored in a client relationship management system, but other data is only held by accounts payable.

To carry out quick and effective credit control, manage it centrally through one piece of software. Online credit control software helps you store all invoice communications and histories in one place. It also gives you insight into your customers’ payment habits, and helps you optimise your chasing strategies. With integrated online software tools, you can save hours each week and boost your cash flow by thousands.

Getting started on a credit control process
Effective credit control will get you paid faster, and that’s good for business. Write down some formal processes that explain how you’ll issue invoices, and what you’ll do if they go past due. Make sure your policies and processes avoid these common mistakes, communicate them to your team, and you’ll be on your way to better cash flow.

If you want to restore the control on your business contact our team at Blackburn Accounting and we will assist you in this process

Blackburn Accounting was honored to be the Major Sponsor of the Annual State Convention for Toastmasters in Western Australia from 26-28 May 2017.
The Convention was held at the newly renovated Tradewinds Hotel in Fremantle
It was a privilege to support the very talented up and coming speakers in Western Australia.
Some of the highlights were:
• The Keynote Speaker – Gary Schmidt DTM PIP the former International President of Toastmaster International

The highlight of the keynote was The Secrets of Successful Leaders
o Building Personal Relationships
o Communication: Are you building commitment from your member/staff
o Must get buying from stakeholders
o Be a service Leader

• The Workshop presented by Phillippa Henderson on Aligning your body language with your message
o The make up of a message is
     55% body movement (confident and poised)
     38% voice (tone and pauses)
     7% words
o Power of the smile - Can you hear a smile on the phone
o Primal brain is assessing for risk and will have instinctual behavior
o Trust your intuition
o Be Confident
     Personal presentation
     Eye contact
     Inhale confidence
     Exhale Doubt
     Build Trust
     Strong Body Position

• The Workshop presented by - Lee Broomhall in learning from your life experiences in providing Authentic Leadership
That creating opportunity for all people
o Be Authentic – be yourself and know yourself
o Be Genuine – this includes demonstrating your vulnerabilities
o Draw on the experiences of others
o BE interested - listen, acknowledge and serve authentically
o Express authentically – can’t always lead from the crowd. At some point, you need to take action based on what’s in the best interest of stakeholders.
o Be your own leadership story
• We were treated to master class session by Dr. Troy Hendrickson on Leadership Strategies and Techniques

I believe this means doing what you say you are going to do.
Have you ever made a promise or commitment to your customer or family member and have not kept that promise?
Commitment is the basis for trust, which is the foundation of all relationships.
On the other side if you break your commitments it equates to destroying trust. We all at some stage breaks our commitments.
In order for Samurais to maintain the tradition of “honour” they must keep their commitments no matter the consequences. (Compassionate Samurai by Brian Klemmer)
The consequences of not keeping your commitments include:
• Money
• Time
• Friendships
• Health; and
• Anything that really matters

What is important is to acknowledge this failing and speak to the effect people to re-establish the commitment. All it takes is one simple telephone call.
I find if I ever break a commitment to something I have promised I will email or make a phone call those effected and speak to them and recommit.
The other thing I have done is that I have engaged in mentors and have hired employees to help deliver and meet all the commitments that I make.
Tell us what you do to ensure you keep your promises?

Owning and managing your own family business is rewarding. Yet it can be a stressful and lonely job. So many things to do, so many great opportunities, so little time, such limited resources, so many people, so many problems. Where has it all gone? How long do I keep going? How can I regain control? How I do pass the business on? When can I retire?

The top 12 issues facing family business:

1. Succession planning
2. Family remuneration
3. Ownership structures
4. Family creed
5. Family members not in the business
6. Non-family management
7. Bringing family members into the business
8. Resolving conflicts
9. Strategic planning
10. Financial structures
11. Preserving wealth
12. Retirement and estate planning

1. Identify opportunities for your business's growth and improvement rather than simply look at your historical figures
2. Provide idea on how to make those opportunities work
3. Help you identify your vision for the future of your business, your goals and the steps to get you there
4. Help you create a regularly updated action plan to achieve those goals
5. Show you how to better involve and build your team so they treat their work as more than just a job
6. Offer dynamic customer service training for your team
7. Offer assistance on how to convert more sales over the phone or face to face
8. Provide feedback and new ides on your marketing and advertising to generate a much better return for your dollar
9. Build key performance indicators for your business to make it run like clockwork
10. Proactively monitor your progress on a monthly basis so you can adjust quickly to maximize profits
11. Help you establish systems that allow you to take the pulse of your business better control your activities and know exactly where you stand at all times
12. Find ways to help you work ON your business rather than IN it, and so help you realize a better quality of life and give you more free time
13. Work to constantly increase your personal wealth
14. Institue strategies for the future-making your business more valuable