Credit control
Are your invoices going unpaid for too long, and you don't have time to chase them yourself? We can take that off your plate. Here's how credit control works, when it makes sense, and what you can expect from it.
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What is credit control?
Credit control means following up on your invoices until they're paid: sending reminders, making calls, and working out payment arrangements. Many small businesses never get around to it. Unpaid invoices pile up, and your cash stays stuck with your customers.
With Nextfactor, you hand that follow-up to an experienced credit manager, someone who chases invoices for a living. The credit manager follows up on your overdue invoices, and nothing happens without your input.
What does the credit manager do?
Takes stock of your unpaid invoices. Which ones are outstanding, for how long, and why?
Contacts your customers. First with a reminder, then by phone.
Sends formal demand letters. When a reminder and a phone call aren't enough.
Works out payment arrangements. Always with your input. You decide whether a customer can pay in installments.
Fills in the gaps. If details or documents are missing, the credit manager tracks them down.
Keeps your records up to date. That way, your books match what's actually been paid.
Reports back every month. You see, customer by customer, what's been paid and what's still outstanding.
If an invoice still doesn't get paid, we'll look together at whether legal action makes sense. Any legal action is taken in your name.
How does credit control work at Nextfactor?
We review your outstanding invoices. How many customers are involved, and how much is at stake? If there isn't enough volume, we'll tell you.
We put your file together. We agree on which invoices to follow up on and how many hours to plan for.
The credit manager gets to work. In your own accounting system, at your office or remotely.
You stay in the loop. You get a report every month, and the decisions stay with you.
When does credit control make sense?
You have a lot of overdue invoices and no time to follow up on them.
You don't want to keep calling your customers yourself. An outsider can keep things more businesslike.
You want to start factoring, but your customer list needs cleaning up first. A factoring company looks at who your customers are and how they pay.
You're not sure which customers are slow to pay. The monthly report makes that clear.
If it's only a handful of invoices, this usually isn't the right solution, and we'll tell you that, too. We only follow up on invoices to other businesses, not invoices to consumers.
An example
This example is hypothetical. A printing company has about sixty overdue invoices spread across some forty customers. The owner never finds the time to call everyone. The credit manager contacts each customer, works out arrangements, and keeps track of what's been paid. After a few months, money starts coming in again. The owner also knows which customers remain difficult.
Credit control, debt collection, or factoring?
If you have unpaid invoices, you'll run into these three terms quickly. They don't mean the same thing.
Credit control means following up on your invoices, with your input. Your customer stays your customer.
Debt collection means recovering invoices that are long overdue. It often comes in only after reminders have stopped working.
Factoring is a form of financing. A factoring company pays your invoices right away and can also take over the follow-up. Read more about how factoring works.
Looking for debt collection for your unpaid invoices? Our credit manager starts with a reminder and takes it further if needed.
Worried a customer won't be able to pay at all? You can protect yourself against that with trade credit insurance.
What should you know before you start?
Outsourcing the follow-up saves you time and gives you a clearer picture. But it's not a cure-all. Here are the upsides and the things to watch out for.
The upsides
You save time. You get on with your work while the credit manager follows up on your invoices.
You stay in charge. Every payment arrangement is discussed with you.
You get a clear picture. Every month, you see what's been paid and what's still outstanding.
Your books stay accurate. The credit manager works in your own system.
What to watch out for
There's no guarantee. The credit manager does everything possible but can't promise that every customer will pay.
Disputed invoices aren't included. If a customer disputes an invoice, that has to be resolved first.
Your paperwork has to be complete. Each invoice needs the supporting documents to back it up.
You give access to your accounting system. Without it, the follow-up can't happen.
There has to be enough volume. For a handful of invoices, it usually isn't worth it.
How much does credit control cost?
You pay for the hours the credit manager works. We agree up front on how many hours to plan for, and every month you get a summary of the hours worked.
How many hours it takes depends on the number of invoices and customers. That's why we start by reviewing your file.
Frequently asked questions about credit control
Don't see your question? See all FAQs.
Credit control means following up on your invoices, with your input. Debt collection means recovering invoices that are long overdue. Our credit manager starts with follow-up and takes it further if needed.
Yes. The credit manager contacts your customers directly. It's done professionally and courteously, and always with your input.
No. The credit manager does everything possible, but there's no guarantee.
Yes. Credit control often comes first. Once your customer list is in order, factoring can follow.
That depends on the number of customers and the amounts involved. We'll look at it together and tell you honestly whether it's worth it.
No. We only follow up on invoices to other businesses.
Want to know if credit control is right for your company?
We'll look at your outstanding invoices together and tell you honestly what makes sense: credit control, factoring, or something else.