Basic Credit Control for SMEs – The Art of Getting Clients to Pay on Time

Our Skipton Business Finance experts offer some simple tips and tricks to help SMEs tighten their credit control procedures, so you can get cash in the bank and get out of bad debt.

If showing up to do the work is half the battle, the other half is trying to get paid. In our industry we call this Credit Control - the occasionally challenging process of getting a company to pay you on time.

Why do companies pay late? Well, we could discuss late payment culture until the cows come home. But what is more helpful right now is to discuss how we can get paid on time.

That’s what Credit Control is all about - developing processes and people to get the cash from your clients into your bank account.

And it’s possible to do this without feeling like a bailiff.

Credit Control for SMEs can be as simple as a friendly follow-up email or quick phone call. You’ll probably do this already but on an ad hoc basis, especially if your team is small.

Even a few tweaks and a little consistency can be what it takes to improve your cash flow and keep business booming.

Here are a few ideas to start with:


Start with some small, simple changes

Don’t mind about reminders - you’ve probably heard of the rule of seven? That it can take up to seven times to remind someone to take an action. So, don’t feel bad about reminding, simple things like adding credit terms to your invoice can help.

Picking up the phone - although email now saves us on postage costs, it’s not always the most effective way to get a response. Sometimes, a friendly phone call reminding a customer that the bill is outstanding is all it takes.

Check over your invoices - it might sound ridiculous, but it is worth checking your invoices, just to see if all valid information is there. Sometimes things get missed, for a handy tick-list try this guide on what to include.

Spruce up your invoices - if you see the same piece of paperwork often it’s easy to become blind to the details. A few cosmetic changes to your invoices could be all that’s needed for clients to take attention and remember to pay.

Sending out a polite, formal letter - it doesn’t have to be harsh but it is important to let customers know that you’re serious about getting paid, especially if the letter looks and sounds a little more official.

Thanking for payments - you don’t have to read ‘How to Win Friends and Influence People’ to know that being nice and thanking people will get you far in business and life.


Start being firm but fair

Credit Control is mainly about managing the relationships with your clients and setting expectations. So, maybe it’s time to start setting out your terms and conditions.

It’s often best to formalise these and have them in writing, rather than just basing your business dealings on trust and goodwill alone.

And it’s best to do this before the invoicing stage too.

If a client wants more work done then, as a new policy, politely insist that you’re happy to take on further work once the outstanding invoices are paid. We’ve seen it happen often in sectors like printing, where companies feel trapped into taking on more contracts while struggling for working capital.

It can be a difficult, especially if you have a small client base, but a firm and fair approach can be a beneficial business move and keep your within credit limits.

One tip - you can also use the recommended credit limits that agencies provide as an authoritative reason to refuse to increase the limits


Start tracking your credit control

If you haven’t already, start keeping a diary log of any calls and emails with your clients about payments.

Every client is different and making a note of the who, the what, and the when could be really beneficial in the long run as you soon learn how to tailor your credit control methods to each client you work with.

We’ve work with many businesses and can provide many examples of the different processes that each sector uses, but at the end of the day you are the best person to decide what would works for your business.


Start closing your cashflow gap

If you’re tired of seeing that widening cashflow gap then maybe one of our Invoice Finance solutions could work for you.

With Invoice Factoring you will get to work closely with one of our friendly, highly-trained credit controllers and a dedicated Relationship Manager. Or if you would prefer to maintain full credit control then Invoice Discounting could be cashflow solution for you.

If you would like a no-obligation FREE quote, please get in touch by ringing us on 0800 0854150 (call 0330 1232437 if ringing from a mobile).

You can also email us at

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