What does good credit control look like?

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Ultimately poor credit control results in reduced cash flow, which can have knock on impacts for supplier, staff, and credit relationships, as well as causing stress for business owners.  It may eventually lead to an inability to continue trading.


Good credit control is therefore key to business success.  But what is good credit control?


What is good credit control?


There are many elements of the credit control process, and each can impact how long it takes for an invoice to be paid.  As an advisor we understand these elements are key to helping our clients keep on top of their credit control.


  • Internal policy, procedures & reporting
  • Sales systems
  • Contracts & customer information
  • Invoicing
  • Follow up
  • Payment & reconciliation


Whilst not all these will be relevant to every business, getting these things right will help to eliminate internal issues as well as reducing customer related issues that delay payments,


At the start of any credit control service engagement, it is therefore important we understand the current position of the business across each of these elements.


Internal Policy, Procedures & Reporting


These elements are standard and apply to every business.  They need to be communicated properly across both customers and team, and adherence to them should be monitored.


A business should also review these on a periodic basis to ensure they are still fit for their purpose – to ensure invoices are paid!


All businesses need to:


  • Establish a credit control process
  • Establish a credit risk policy
  • Establish a customer information policy
  • Establish a reporting and monitoring process


We help to shape these policies and processes for your clients as part of our credit control services.


Your team will need to be trained on these policies and where relevant their performance should also be assessed and rewarded in relation to adherence with these.


Sales bonuses should be paid out when invoices are paid rather than raised.


Whenever invoices are past due, checks should be made to see if policies were followed (ie a credit check was completed before the contract being agreed).


Customers are communicated these policies via contracts and invoices, which are then used as a common reference point for resolving disputes about payment.


Monitoring and reporting will encompass:


  • Review of aged debtors/receivables – high impact customers, debtor days, overall amount owed
  • Review of credit limit breaches


Such reports are attainable from a combination of Satago and Xero.


Sales Systems


Where integrated sales systems (like Xero) are being used it is important that these are set up properly to prevent errors that delay invoice payment.  Such errors might include:


  • Duplicate invoices being raised
  • Incorrect customer information
  • Incorrect VAT treatment
  • Invoices being assigned to the wrong customers


If incorrect invoices are sent out this will inevitably lengthen the process for getting the invoices paid, as well as adding to the workload of credit controllers.


Completing a sales reconciliation may be necessary in order to identify and correct errors, particularly where items are being sold on credit terms.


Also ensuring payments are reconciled in a timely manner to stop chasing for invoices where payment has actually been made!


Contracts & Customer Information


Contracts are the key method of communicating credit related policies to customers.  At the time of agreeing the contract, it is important to accurately capture the details of the customer, and ensure that everything is in place to prevent a slow-down of invoice payment.


Important credit-related contract terms include:


  • Defined terms of credit and payment:
    • When is payment due
    • How should payment be made
    • Late fees applicable
  • Definition of when work is determined as ready for invoicing
  • Defined process for scope changes.  Changes in scope that are not formally agreed may delay an invoice from being paid due to queries or disputes.


Customer information to be gathered or checked at this stage is shown below.  Cloud based forms could be used to gather this information and automatically updated accounting systems using integration tools like Zapier.


  • Legal name and address for billing
  • Contact details for the accounts department (if applicable), as well as key contacts for delivering the product/service.  Must include a phone number and email address.
  • Escalation contact details in case of issues
  • Confirmation of how invoices should be sent (larger companies may require upload to a portal for example)
  • Ensure a Purchase Order has been received (if applicable)
  • Credit check to make sure they fall within the risk profile (credit score) that you are willing to assume.  This is relevant for both new and existing customers.  Satago’s credit checking software can be used to do this.


The credit score will be saved and an appropriate credit limit will then be set in Satago based on the risk profile, to help manage credit risk.  This can be overridden if required.




It may seem obvious but getting the invoice out as soon as possible is the first step to getting paid.  Having a well defined process for establishing when work is complete, and communicating that to whoever is responsible for raising the invoice, will assist with this.


Then it is critical that the invoice has the right information so that it doesn’t get queried for that reason.


  • Legal details
  • Relevant PO number
  • Description of products/services provided in the level of detail agreed


Make sure you have connected an integrated payment gateway to your Xero (or other cloud accounting system).  GoCardless, Stripe and PayPal all have integrations.  Satago pulls through the invoice, so those payment gateways can be used by the customer when they receive the invoice reminder.


Yes, there are costs to these payment services, but these costs should be weighed up against the cost of delayed payments – your time etc!!


Having an approval process in place before invoices are sent out can help prevent errors that would slow down the payment.


Follow Up


This is where systems like Satago can really support traditionally time consuming aspects of the credit control process with automation,


Invoice payment reminders should be set on a sequence that escalates as invoices become further overdue.


We recommend that reminders are sent a few days before, and on the day of the invoice becoming due.  The reminders should ideally include an option to view and pay the invoices in question – making it as easy as possible for the customer.


Once the first overdue has been sent, following reminders should be sent to an escalation contact at the customer, cc-ing the primary contact.


Any queries that arise from these reminders should be responded to quickly.  The slower the response, the longer the wait for payment.


Logging key reasons for non payment in a standardised format that can be aggregated into reports will help to identify trends that need to be addressed.


Email reminders should be combined with phone calls, with any conversation held over the phone logged into the credit control CRM so that there is a complete audit trail.  Satago facilitates this by allowing you to add comments against any outstanding invoice.  This makes assessment of the citation easier for different people that may be involved in collecting the payment.


Following through with your escalation process is key.  If you make your customers aware of upcoming escalations but do not follow through, they may doubt your conviction and payment may be delayed further.  


Providing monthly statements outside the follow up sequence provides additional touchpoints that may assist in getting outstanding invoices paid.  These can be sent automatically from Satago.


Payment & Reconciliation


We do bookkeeping on a daily basis to ensure that payments are matched to the correct invoices and any queries or disputes are raised immediately.  If you are doing your bookkeeping yourself and it’s not practical, then bookkeeping should be completed ahead of the day reminders are sent out to customers.


This will ensure that information that is relied on for automation of follow ups is accurate – and you’re not chasing customers who have actually already paid!  It will also mean your reports are up to date.


Once an invoice has been paid, sending thank you messages as acknowledgement may help improve customer rapport.


Next Steps


We hope this has helped give you a flavour of what good control looks like, and some quick wins in there you can implement. 


If you do need a hand with the implementation we’re here to help – check out our credit control options here!