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Credit control

Update 13 Dec 2021

Major changes happening in this Coda document which will soon be retired

This page has been copied to the Handbook (Bookkeeping)

Credit control is a key area of cash flow management by ensuring you are paid by your customers on a timely basis.

A good credit control process will include:

Establish internal credit control procedures regarding:

Payment terms

Who will be responsible for credit control - finance or account managers

On boarding new clients - credit checks, invoicing information

Agree payment terms with customers upfront based on internal procedures and the customer

Issue invoices immediately once the service has been provided

Monitor aged debtors regularly

Chase late payments on a weekly basis - this process can be automated with software, such as Chaser

Chaser

Chaser is a credit control software that helps to effectively automate chasing customers to pay their invoices without losing the human touch. Chaser can be linked to Xero, Quickbooks and Sage Business Cloud Accounting so details of who to contact and for how much are automatically updated to reflect information in your accounting system.

It provides automated email chasing based on:

Tailor email templates with multiple templates based on the level of escalation (overdue by 7 days vs. overdue by 7 months)

Custom schedule for chasing

Debt collection

Once it is clear that chasing alone isn’t working, there is the option to escalate the issue through debt collection. Most debt collection agencies collect debt for a fee or percentage of the total amount once the debt has been recovered.

There is also Money Claim online service to file a claim for a fee. The fee can be added to the total debt and reclaimed from the customer. Details of this can be found

here⁠

Collector by Chaser: Cash collection for SMEs

Traditional debt collection can be expensive, time consuming and aggressive, damaging valuable relationships with customers that these businesses simply can’t afford to lose.

Collector offers a transparent, empathetic, collections solution using chaser's vast insight to help businesses get their most difficult invoices paid in a single click.

How does collector work?

Currently you can select either chasing or not chasing in chaser for individual invoices or customers. With Collector there would be an additional button for escalation. If selected, all communication would be managed by Collector.

Escalation is done in stages:

Stage 1 - Calls, emails, letters, texts

Stage 2 - Continued Collections plus legal escalation

Stage 3 - Legal action (country court judgement application; court action)

All communication is saved in Chaser, similar to how you can currently see emails sent and notes.

'No win, no fee' pricing

Commission is paid when the debt has been collected.

Commission is a factor of:

Days overdue

Stage of escalation

For example, an invoice which is 30 days overdue being escalated at stage 1 will have a lower percentage than an invoice which is 60 days overdue being escalated at stage 1.

Pricing

Pricing

Stage

Commission

Cap

Stage 1

5-15% of the invoice value

£10,000.00

Stage 2

Up to an additional 1%

Additional £100

Stage 3

30-50% of invoice value

No maximum

There are no rows in this table

⁠

Resources

⁠

The ultimate guide to credit control by Chaser⁠

⁠

Better credit control procedures for modern businesses⁠

⁠

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