Credit Control Solutions

CCS Launches new “Pay-as-you-go” Credit Control Service!

Off of the back of our continued success, we have just launched our “Pay-as-you-go” outsourced credit control service. Unlike our competitors, we listen to feedback from prospects and customers and they have been telling us for some while that a “Pay-as-you-go” outsourced credit control service is what they want, so that is precisely what we have given them..!

You can use our credit control service for as little as one day, for a week, for a month, for 3 months, for 6 months, indefinitely, or on a “project” basis. You can use it to assist your in-house credit control to collect your money more quickly. You can use it to blitz your ledger periodically, or just as a one-off. In essence, I am saying that you can use our service and pay for our service when it suits you as opposed to being tied in to silly and lengthy contracts that mean you have no choice but to pay for a service that you no longer need.

Our “Pay-as-you-go” outsourced credit control service can be used for so many different reasons. I have listed a few below just to help you on your way. 

• To Cover holidays or any absence
• To cover maternity/paternity leave
• To compliment your in-house credit control function
• To completely replace your in-house credit control function
• To replace the need to employ expensive temporary credit controllers (we are better and way less expensive)
• On an interim basis whilst you recruit a new credit controller 

I could go on, but, I think you get the picture..! Just to clarify, you can use our service for any conceivable reason that you wish – all you have to do is ask us. 

To summarise our offer:

• You can use our service for a day, a week, or any period of time that you wish
• It can be used for any reason that you require
• You pay us when you want us and not when you don’t
• There are no set-up charges, no minimum charges and no silly contract tie-ins.

Interested? Then email us here, or telephone us here, quoting ref “PAYGCC" and get a special introductory offer..!

Jamieo “Making Your Cash Flow”

Free Credit Control Resources: Google (Update)

We are currently doing a debt collection job for our friends at Invicta Power Service and once again using Google has provided us with some invaluable information..!

We took on this job on 25th May 2010. We sent a Statutory Demand for payment to:

• The Registered Office Address
• The Directors Home Address
• and to several email addresses that we picked up from Google.

3 days after we had sent the demand, we received a telephone call from one of the hairdressing salons concerned. She acknowledged receipt of the demand and said that she would get the director to call me.

Needless to say, we never heard back from the director.

On 2nd June, I sent a chase up email to the Director and once again heard nothing back.

On 9th June, Invicta Power Service informed us that they had been contacted by the director and fixed up a meeting to discuss monies owed. At the meeting the debtor agreed to pay, but payment has not been forthcoming at the time of writing

Today 14th July 2010, I contacted the Director on his mobile phone and he "pretended" that he was not the debtor. When I pushed him, he became incredibly abusive F'ing & blinding etc. We thought this was funny and simply laughed at him. Anyway, I got my message across to him - i.e we would issue Winding up Proceedings against him if payment was not forthcoming.

After this telephone call, I informed our friends at Invicta Power Service of my telephone conversation with the debtor and said that it would be unlikely that we would recover the money for them on this occasion. The debtor is a wide boy etc.

After putting the telephone down, I took my own advice and started to do some research on Google. Even I was amazed at what I managed to uncover. It turns out the debtor:

• Received a 4 month suspended jail sentence for a physical assault of a Dr in Ashford, Kent.(incidentally, the Dr concerned was beaten up so badly that he can no longer practice as a Doctor)
• Is a Parish Counselor
• Is on "Linked In" and we happen to have several friends in common..!

The above information is very useful to me in debt collection terms, as, clearly I have established that the debtor has both an on-line & offline reputation to protect and we will obviously use this to our advantage.

Incidentally, our friends at Invicta Power Service paid us £60.00 + VAT to use our statutory demand service. For this service, we will:

• Issue a Statutory Demand for payment to several addresses and by email, fax etc
• Make one follow up phone call to try and secure payment.

In reality, we always do more work for our customers than we actually charge for. In this case, we have

• Issued the Statutory Demand for Payment.
• Sent 3 chase up emails
• Made 5 x phone calls to the debtor &
• Spoken with our friends at Invicta 3 times.

So, you know where to come for cost effective and added value debt collection

Jamieo "Making your cash flow"

I will name the debtor in due course, if we do not recover the debt, so that we can warn everybody in Kent not to do business with this guy/company

Free Credit Control Resources: Google

Do you use Companies House to help you with your Credit Control? If not you should! In our opinion, the Companies house webcheck service is a much under used resource that we are going to shout about from the roof tops in order to help reduce your exposure to bad debt!

Their webCheck service allows you to get lots of invaluable information on any UK Limited Company. You can check companies out by name or by using their company registered number. Even if you don’t know the precise name of the company, you can find them by simply typing in the first few letters of their name and tabbing through the list until you find them

You can establish basic information such as:

•   Date the company was incorporated (this is useful to help you assess whether or not you wish to do business with a new prospect. If it is newly incorporated, you may wish to ask for full payment upfront, or a deposit, or put them on an automated form of payment, such as; Direct Debit or Continuous Payment Authority)
•   Company Type
•   Nature of Business (SIC Code)
•   Accounting Reference Date
•   Last Accounts Made up to
•   Next Accounts Due (This is very useful and will highlight if they are late filing their accounts. Normally, if accounts are filed late, this is a red flag and means that the company is in some form of financial difficulty)
•   Last Annual Return Made up to
•   Next Annual Return Due (This is also very useful and will highlight if they are late filing their annual return. If annual returns are filed late, again, this is a red flag and means that the company is more than likely in some form of financial difficulty)

All the above information is free; you can however download copies of annual returns and company accounts directly from companies’ house website for a nominal fee. However, unless you are an accountant, it can be difficult to assess a company’s creditworthiness from a set of accounts.

We would suggest that you always check out new customers using companies house WebCheck service. This is better than not checking them out at all and will at least give you more of an idea as to their creditworthiness. If for example a prospect is late filing their accounts and or annual return, we would suggest that you check them out further by doing a credit check on them.

WebCheck via Companies House is a very useful service and if used wisely, it will certainly help you to reduce your exposure to bad debt.

The safest way of checking out a prospect though is to obtain a credit report on them.

  

Jamieo "Making Your Cash Flow"

 

 

Jamieo "Making Your Cash Flow"

 

Free Credit Control Resources: Companies House Webcheck Service

We are going to do a series of hints and tips on free credit control resources that are available to help you manage your credit control better. We are starting with Companies House today.

Using the Companies house webcheck service is a much under used resource that we are going to shout about from the roof tops in order to help reduce your exposure to bad debt…!.

Their webcheck service allows you to get lots of invaluable information on any UK Limited Company. You can check companies out by name or by using their company registered number. Even if you don’t know the precise name of the company, you can find them by simply typing in the first few letters of their name and tabbing through the list until you find them. Anyway, back on track….

By using the webcheck service you can find out basic information such as:

·   Date the company was incorporated (this is useful to help you assess whether or not you wish to do business with a new prospect. If it is newly incorporated, you may wish to ask for a deposit, or to put them on an automated form of payment, such as: Direct Debit or Continuous Payment Authority etc)

·   Company Type

·   Nature of Business (SIC Code)

·   Accounting Reference Date

·   Last Accounts Made up to

·   Next Accounts Due (This is very useful and will highlight if they are late filing their accounts. Normally, if accounts are filed late, this is a red flag and means that the company is in some form of financial difficulty)

·   Last Annual Return Made up to

·   Next Annual Return Due (This is also very useful and will highlight if they are late filing their annual return. If annual returns are filed late, again, this is a red flag and means that the company is more than likely in some form of financial difficulty)

All of the above information is free; you can however download copies of annual returns and company accounts directly from companies house website for a nominal fee. However, unless you are an accountant, it can be difficult to asses a companies creditworthiness from a set of accounts.

We would suggest that you always check out new customers using companies house webcheck service. This is better than not checking them out at all and will at least give you more of an idea as to their creditworthiness. If for example a prospect is late filing their accounts and or annual return, we would suggest that you check them out further by doing a credit check on them.

Free resources can be very useful, but, you do normally get what you pay for and if you pay nothing, you normally don’t get very much. Having said this, Webcheck is a useful service and without a doubt if used wisely, it will certainly help you to reduce your exposure to bad debt.

Far better though, is to credit check any new prospect before you do business with them. Credit Check existing customers at least once per year – especially if you have noticed a change in their payment habits, or, if they have started to trade with you more than usual, meaning of course that your risk of bad debt is a lot higher.

If you require further information on our credit checking service, please email us. We can give you online 24/7 access for a silly price, or, you can email us your list of debtors and we will check them all out for you and email you copies of the credit check reports, or you can use us for the odd credit check here and there – the choice is yours

  

Jamieo "Making Your Cash Flow"

Property Maintenace Company - a Case Study

A Property maintenance company outsourced their credit control to us a while ago. They were at their wits until they found us on the web. They called us in a desperate state saying they had previously outsourced their credit control to one of our competitors, but they simply did not understand their business and were as much use “a chocolate tea pot”

 

The Managing Director went to great pains to explain how their business worked – they do maintenance work for large property management companies. This is how it works; the property management companies collect rent and service charges from their customers; typically; residential or commercial blocks. An element of the money they collect from their tenants goes towards property maintenance. The property management company raises a works order and instructs our client to do the work.

 

Our client does the work and raises an invoice to the property management company, quoting the works order number, the property address etc. The property management company then fails to pay them. This was a huge problem for them with as much as 80% of their aged debt being more than 90 days old! No wonder that cash flow was a major problem for them.

 

Anyhow, it was only once we started working with them that we realised there were more problems to overcome…

 

In the normal course of events when creating a sales ledger account, you would create one account per debtor. Our client it transpired had created one account for each property that they did work on.

 

E.G, let’s say that our client was appointed by Joe Bloggs Property Management to do some maintenance work on the following 4 properties:

 

1.     Alderley Rd, Beddington

2.     Chatsworth Rd, Debyshire

3.     Ladywell Rd, Lewisham

4.     Congruit Rd, York

 

Once the work had been completed, what they should do is raise 4 separate invoices on the account of Joe Bloggs Property Management. What they are doing is creating 4 separate sales ledger accounts in the names of the properties – Alderley Rd, Chatsworth Rd, etc. and then putting the name of the actual company that instructed them to do the work (Joe Bloggs Property Management) in the contact name field within Sage

 

On the face of it, I can partly understand why they are doing it this way (so they can break down how much money they are owed on a “per property” basis), but it is the wrong way of doing it and is one of the major reasons for their credit control/cash flow nightmare. You could quite easily achieve the same thing in Sage by creating one debtor account in the name of Joe Blogs Property Management and then setting up separate departments for each property that you do work on. When you raise an invoice, you select the relevant department (property). This enables you to report on monies owed by debtor and by property if you choose.

 

In the normal course of events when telephoning a debtor and chasing for payment, you click into their account (in Sage), make your call and then reel off a list of invoices that you are chasing. Due to the way in which our clients’ sales ledger is structured, it is impossible to do this. There is no way that you can see “at a glance” what is owed. We would quite literally have to click in and out of 100 individual accounts to reel off a list of invoices owed by the debtor. Firstly, we do not have the time to do this (and it is not a smart way of working in any event) and secondly, I doubt the debtor would be impressed with our taking up several hours of their time on the phone either.

 

We have designed and tailored a report within Sage Line 50 that groups all the individual properties by Debtor. Once the report has been run, we export it into Excel and email it to the debtor. The report contains all the information that they require enabling them, to put their comments on the spreadsheet and email it back to us. We worked in a very similar way with a large physiotherapy practice a couple of years ago to manage all their individual debtor claims with Health Insurance Companies.

 

Needless to say, our client is ecstatically happy because there is now some structure to their credit control and they can plainly see that their cashflow nightmare will disappear very quickly.

 

To see all of our testimonials/case studies, click here

 

Jamieo "Making Your Cash Flow"

Late Payment Legislation - is it Worth it?

Late Payment Legislation – is it Worth it?

As you can probably guess from the title, we are not huge fans of Late Payment Legislation, or to give it its proper name: “Late Payment of Commercial Debts Regulations 2002” Don’t get me wrong I am not completely against it and it certain cases it can and does work, but, when you look at the time involved in administering this legislation is it really worth it from a commercial perspective?

 

It sounds all great and wonderful and it makes it look as though the government is taking action against Late Payment, but, in reality are they really? Lets look at a few of the facts, through an example

 

Let’s say you had an invoice outstanding for £900 dated 31^st January 2010 on 30-day payment terms. For the purposes of this interest calculation the date today is: 23^rd May 2010

 

There is a useful interest calculator on the “Better Payment Practice Campaign” website which can be used to calculate statutory interest due in accordance with  “Late Payment of Commercial Debts Regulations 2002” or indeed for any contractual interest due in accordance with you terms of business/contract

 

Using the above interest calculator, it shows you are due £17.19 in interest. In addition to this you are also able to claim a one-off late payment compensation fee of £40.00, making a total of £57.19 to be claimed.

 

Here comes the tricky bit..! If you use Sage or another competent accounts package, there is a facility for you to calculate interest and automatically add it to accounts with an overdue balance. I am sure that you will also be able to use this function to add the late payment compensation fee too?. If not, you will either need to raise an invoice to your customer for the interest and late payment compensation fee, or journal it onto their account with you and write to them to let them know about it.

 

For the purposes of this example, let’s say you are using Sage Line 50 and choose to automatically add interest and the late payment compensation fee. Once you have added the fee, you will need to let your customer know about it, either by writing to them or sending them a statement. This is easy enough to do in Sage, but you must remember there are costs involved in taking these actions. Let’s say that you choose to write to the debtor to inform them. The cost of sending a letter will generally be circa £1.50 when you include all overheads etc

 

Ok, your customer receives your letter and completely ignores your claim for interest, but does pay you the £900.00 they owe you. This means a balance of £57.19 is left outstanding on the account. You will need to make a decision as to what actions you are going to take in respect of this small outstanding amount. Do you continue to chase this balance, thus potentially putting at risk future trading with your customer? Do you leave the balance outstanding and choose not to chase it? Questions, questions eh.

 

Whatever you decide to do, there is a big chance that you will end up having to write this balance off at some stage. This of course means more work for you – i.e. you will need to raise a journal and again this will be at a cost.

It is ok, if you only have a handful of accounts to manage, but, lets say you have 100 accounts on your ledger and 50 of them are charged late payment interest and late payment compensation, when you look at the amount of work involved in writing most of these small balances off is it really worth charging interest in the first place? Probably not?

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What Is Good Credit Control All About?

In essence, good credit control is all about making sure that everything you do within your company that impacts on getting paid is done properly and diligently; from making the initial contact with your prospect right through to sending them an invoice.

 

Let me explain: You receive a new enquiry from a prospect. They ask you for a quote. Before providing them with a quote, you should credit check them to see whether or not they are a viable company and know the “legal entity” you are dealing with. The quote you provide them with should be very detailed and include precisely what your prospect is getting for their money. It should also include your payment terms and what they must do to accept your quote.

 

An order should then be signed. Again, the order should detail the product or service you are supplying, it should refer to the quotation and once again should re-enforce your rigorous payment terms and of include all your terms of business.

 

Your prospect should also complete and return an “Account Information/Account Opening Form”, to include contact details of the buyer, the contact details for the accounts department etc. A new account should be created to include all contact details. On so many occasions an account is opened which does not contain all the basic contact information. From the credit controllers view point, this is so annoying as it means that before they can contact the customer for payment they must scratch around looking for basic information. If you are a medium or large company with 500 accounts to credit control, it is easy to see the time that could be wasted looking for information!

 

The minute you have supplied your product or service an invoice should be raised. The invoice should contain all the relevant information:

 

·   Address the invoice correctly (to include a full post code)

·   Send the invoice to the correct person – this may not necessarily be the buyer

·   Include a reference to the buyer of the goods or service

·   Quote any reference or purchase order number you have been given

 

·   Include a detailed narrative on the invoice that means something to the buyer of the goods or service (Purchase of 1 x HP56213 doesn’t mean anything, whereas; Purchase of 1 x HP LaserJet Printer in accordance with our agreement with Joe Bloggs does!)

 

·   Send invoices as soon as possible - not only is this necessary to establish the correct date for VAT purposes, but it also starts the credit-period clock ticking.

 

We haven’t spoken much about actual credit control yet have we? The point is; good credit control is not just about having a proper credit control policy in place, it is making sure that the chain of events before credit control gets involved is watertight and working correctly. So, when it comes to “actual credit control” your credit controller can contact the customer confident in the knowledge that all the “I’s” are dotted and the “T’s” crossed. Psychologically, this immediately gives your credit controller the upper hand.

 

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Jamieo"Making Your Cash Flow"

 

 

When to Start Debt Collection?

 

The question is: at what stage are you comfortable starting debt recovery action? The answer to this question depends very much on how diligently you have credit controlled your customers?

 

Everyone has an explicit right to expect to be paid on time right? After all you supplied the goods/service as agreed, so why shouldn’t you expect to be paid on time? When it comes to credit control you should “Hope for the best, but expect the worst” i.e. assume they are not going to pay you and devise a credit control process around this assumption.

 

If you have very good credit control process in place, then by the time the debt is 60 days old, your debtor should have received 2 x statements of account and 3 x standard letters/emails and several telephone calls. On this basis, if your debtor has not paid you by 60 days, I would say it is time to instruct a debt collection agency (such as ourselves) to pursue your debtor for you.

 

If on the other hand, you do not have a good credit control process in place and merely just expect to be paid, or perhaps send out a statement here and there, referring your debtor to a debt collection agency to pursue at 60 days is probably not the right thing to do. In effect, you are penalising your debtor for your own ineffective credit control practices.! The solution to this problem is; make sure that you have a good credit control process in place to avoid your customer blaming you for the breakdown of the relationship.

 

We offer a full range of debt collection services and what’s more the way we charge for our debt collection services is fairly unique within the debt collection industry -  “More of the money we collect goes in your pocket and not ours”

 

We have lots of testimonials on our website from satisfied customers for you to peruse’ so that you can satisfy yourselves that we are a professional outfit and will always collect monies from your debtors with a view to keeping the door open in terms of your relationship with them

 

 

Jamieo "Making Your Cash Flow"