Keeping a tight rein on your credit control

keep a tight rein on your credit control

Working for yourself is a great choice when you have a family.  The flexibility it affords is second to none.

Wouldn’t it be a dream if you could get paid as soon as you finished your work, so that you could swiftly move on to the next job and pay all those pesky bills that need paying in the meantime?

Yes, a dream! Sadly, the reality is that the vast majority of us will at some point need to chase up late payers. And when it comes to late paying companies, often, the bigger they are the worse they are at paying up.

If credit control happens to be your worst enemy, read on for some top tips on how to keep a tight rein on your cash flow and get paid on time.


Protect yourself beforehand


It’s a good idea to protect yourself with upfront payments, at least with new clients that you have worked with before. A 50% deposit is not unreasonable, with the balance due on completion. (Incidentally, this shows the importance of having an agreement in place between you, with details such as payment terms clearly stipulated).

In my post “Know your customer, know your supplier” I also give some tips on how to do your homework with credit, company and directorship checks.



It may sound like such a simple thing, but if you don’t invoice on time, you won’t get paid on time.

Invoice as soon as you’ve finished your client’s work. Don’t let your billing run over a week late, as you’ll either run the risk of forgetting if you have a particularly heavy work load on, or you’ll simply spend far too much time trying to catch up.

Make sure that your terms of payment are clearly stated on there, such as for example, a polite notice which simply states “Thank you for settling within 14 days”. Accounts departments notoriously put off payment of invoices in order to improve their cash flow, so don’t give them any excuses.

It’s not a bad idea to state how much interest late payments will accrue.  Or, why not encourage prompt payment with a discount off their next service?

And don’t forget to show what forms of payment you can receive; Credit Cards, Paypal, BACs, etc.


Due dates

One of the most important things to keep track of is due dates for payments.

You could simply create an excel spread sheet to keep a track of everything, but I’d suggest that as a busy parent, you do yourself a favour and use something specifically designed for the purpose.

There are software packages available to help you keep track and which make the whole admin process less time consuming. These include Sage  and I also recently reviewed WinWeb’s accounting package.


Don’t be afraid to remind your clients

If the last thing on your list of things to do is accounts, then the chances are it’s the same for your clients too. It’s easy to forget to pay an invoice if no-one reminds you, so get on to this as soon as an invoice is showing past due.

Set up a standard, polite template to send by email/letter to follow up, and send it the day after your invoice is due.

Be firm, but don’t threaten. The emphasis should be on polite.

If you hear nothing after a day or two, then follow it up with a phone call. If you get nowhere, however, you will need to consider taking it further.


Taking it further

It’s a sad fact that some people just will not pay, despite persistent reminders. If you are getting nowhere with a client despite many attempts to get paid, you may need to take it further.

One alternative is a debt collection agency. Don’t assume that the larger debt collection agencies are necessarily the best. In fact, in some cases, they might not be if the sum owed is small.

Alternatively, many jurisdictions provide affordable means for small businesses to go through the small claims court.  Take note –  many people report that the aggravation is hardly worth it, but you should perhaps investigate this for yourself.


Suffice to say that keeping on top of your credit control is at least the first step to ensuring a healthy cash flow.

What other tips would you add?




I’m Mary Cummings, a ghostwriter, collaborator and all round word doctor. I help business owners write and publish business books; I'm also passionate about helping creative freelancers find work that they love - their work sweet spot with work on their terms, projects they love and clients who are a dream to work for.

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