What is credit control?
Definition of credit control
Credit control is the practice of making sure your customers don't take too long to pay you.
When you send an invoice, you should set 'payment terms' for your customers on the invoice. These are the number of days you will allow them to pay your invoices.
You may decide you want to be paid as soon as you issue your invoices, or otherwise that you're happy to give your customers some time to pay, such as 7 days, 14 days, 30 days or even 60 days. Plan your cash flow carefully and make sure that you will have enough cash to pay your bills if you give your customers longer to pay.
If your customers take longer than your payment terms stipulate to pay your invoices, you will need to chase them up for payment, for example by phoning them to remind them about the invoice, or by sending them an email reminder. This is called credit control.
If you're concerned that credit control might damage your relationship with your customers, consider hiring a bookkeeper or virtual PA to remind the customers for you.
Ultimately, if your customers do not pay you at all, you are legally allowed to charge them interest - and as a last resort you could look at suing them for your money back. Here is more information about charging interest from Gov.uk
Getting your invoices paid faster
FreeAgent's invoicing software helps you get paid faster with recurring invoices that can send themselves automatically, nudging those pesky late-paying clients with automated reminders. The clients can view invoices online and pay by credit/debit card, Direct Debit or PayPal. You can also choose from a gallery of invoice templates, or customise your own with CSS to give them that personal, professional look.
Got questions? Ask Emily!
FreeAgent's Chief Accountant Emily Coltman is available to answer your questions in the comments.