From XU Magazine, 
Issue 28

The importance of end-to-end credit control in one system

An efficient credit management system is beneficial to any business. Access to all receivables functionalities in one place minimises late payments and speeds up your processes - improving your business’ cash flow and efficiency.
This article originated from the Xero blog. The XU Hub is an independent news and media platform - for Xero users, by Xero users. Any content, imagery and associated links below are directly from Xero and not produced by the XU Hub.
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Credit management can be broadly categorised into four sections:

  • Credit analysis and risk management
  • Collecting cash
  • Managing disputes
  • Managing debtors

The overall aim is to have customers pay invoices on time and according to the predetermined terms.

An efficient credit management system is beneficial to any business. Access to all these receivables functionalities in one place minimises late payments and speeds up your processes - improving your business’ cash flow and efficiency. A good example of an end-to-end credit management software is Chaser. With Chaser, you can count on support throughout the entire credit control journey. You’re able to credit check which customers to grant credit to, chase payments, set up payment installment plans, collect payments via your Payment Portal, and escalate to debt collections.

1. Credit check

With 48% of all invoices issued paid late every month, making sure you are ‘in the know’ about your customers and extending credit to those who are willing and able to pay you is essential.

To empower you when making crucial decisions, use a platform that facilitates in-app business credit checking. You’re able to categorize customers based on different criteria. It’s possible to score them based on financial behaviour and attributes.

You’ll have a better perception of risks, as you can calculate and monitor credit limits and identify business opportunities. You’re able to make informed decisions about your business and business partners confidently.

2. Monitoring and communicating with debtors

Regular monitoring of outstanding debts and communicating with debtors is essential to the health of your receivables, this helps to identify overdue amounts, consistent late payers, and ensure you are following up on them with the necessary course of action.

Having a streamlined system makes it possible to view all debtors, communications and replies, and automate tasks like sending payment reminders. By integrating with your accounting system, you can ensure you’re always working with the most up to date debtor information and reports.

3. Chase late invoice payments 

Chasing overdue invoices can be hectic and time-consuming. To overcome this challenge, make use of a sound credit control system such as Chaser. You’re able to set polite payment reminders for follow-ups.

Chaser comes with a centralised hub or receivables ‘CRM’ that automatically documents your chasing activity for each customer. This reduces your workload and eliminates the possibility of errors such as contacting one customer multiple times.

4. Offer payment plans 

Large invoices often serve as a deterrent to customers clearing their balances quickly as they could be struggling with cash flow. Flexible arrangements allow customers to make partial payments for a defined duration.

Credit management software enables you to set customised payment plans, adjust, and keep a record of payment arrangements. Systems like Chaser can send your customers notifications to confirm the arrangement, chase installments, and track payments made against plans. 

5. Collect payments

Giving your customers access to a payment portal to pay their invoices facilitates several self-service options. Besides reducing your workload, it gives customers a greater level of control over how they pay you.

Having efficient credit management software also increases the possibility of getting paid. This is because all customers instantly have easy access to the information they require to make payments. Additionally, they have several options they can use to make the payment instantly.

The right software for you should increase convenience for you and your customers and ensure you are always on the same page about what’s due, when. An efficient payment portal makes the payment process easy. For example, with Chaser, in each payment reminder, you link customers to their dedicated Payment Portal and offer multiple payment options, payment plan requests and dispute communications. This will save you from administrative tasks and increase your chances of receiving payment - by offering more payment options to suit customers’ needs.

6. Recover debt 

Understandably, maintaining good customer relationships is vital to any business. However, running a successful business means you need to collect payments. Standard methods of debt collection can be costly, hectic and unfriendly.

When choosing a collection agency, it’s essential to find one that guarantees payment in a manner that doesn’t damage the relationship between you and your customers. They should be able to handle your requests carefully, recover debt on time, and maintain your business relationships.

Professional debt collection agencies such as Chaser fast-track the recovery process for aged receivables, you are able to get a customized collection service for you and your business. With providers like Chaser, you can keep track of all communications and the collections process, 24 hours a day. 

7. Reconcile it all 

Most accounting systems have limited tools for credit control management. However, you can have a specialised credit-control management tool integrated with your accounting system  or via CSV import.

This ensures your business can still gain the time saving and cash flow benefits of receivables software, without needing to manage two systems separately. With tools like Chaser, data automatically syncs with your Xero account every hour, before any payment chasing is sent ,and on-demand when you choose. 

8. Report on it

Having all your debtor information and chasing activity up to date in one centralised system is valuable when making business decisions. You are able to view and generate instant reports on the health of your receivables, customer risk, and payment behaviour insights.

Why leave it there?

To save time and get paid faster with end-to-end receivables management

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