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Do you struggle with late payments?
Do you lack clarity on what credit you offer your clients?

The problem may not be what you think it is…

We’ve come a long way since I started working as a credit controller.

I knew what I had to chase from the cumbersome paper ledgers, made up of the third carbon copy of the statements we sent out at the beginning of each month.

We wrote notes on those statements (and had to transfer any relevant ones over each month), but there was a deep sense of satisfaction when you could cross a line through an invoice because you’d been paid.

We weren’t quite in the Stone Age, though. There was a huge IBM machine in the corner of the office that held all the invoice records, and we had to mark off invoices that had been paid using a light pen!

 Our communication choices with clients were phone calls, faxes, letters or a face-to-face meeting.

New Technology

 Over time, we got PCs, initially one between two on a swivelling arm, then eventually one each.

And things have continued to progress with considerable advances in software as well as the tech.

With the rise of automation technologies, many businesses have turned to automated solutions for managing their credit control processes. These days, automated reminders have become the most prevalent form of communication with our customers. Dedicated apps can even use AI to decide what to say and when to send communications, requiring little or no input from you at all.

Automation Has its Place

It streamlines repetitive tasks, reduces human error, and can save valuable time and resources. This can be a game-changer for small businesses, allowing them to focus on growing their business rather than getting bogged down in administrative tasks.

I’m a big fan of making life as easy as possible.

Automatically sending invoices and statements can save a lot of time, and making the most of the automated reminders in your accounting software is good practice; it will catch those who pay late because they get too busy and forget.

They’re also great for businesses with high volumes of low-value invoices, such as mobile phone providers, where it’s not cost-effective to call everyone.

Automation on its Own is Not Enough

Small businesses, especially, depend on building strong relationships with clients for repeat business and referrals. However, relying solely on automation can have drawbacks, particularly in maintaining personal customer relationships.

While efficient, automated emails lack the human touch essential for fostering these connections, and, even with the use of AI, they may not always adapt well to the nuances of individual customer relationships.

The key takeaway is that automation shouldn’t be the only form of communication with your clients about payment.

Balance is Key

While automation can significantly improve efficiency in your credit control processes, it should complement rather than replace human interaction.

Overreliance on automation can make your customer feel like just another number in a system rather than a valued business partner. A personalised phone call or email often yields better results than a generic automated reminder. These personal interactions show clients that their business matters, and they’re more likely to respond positively.

Bringing the human back into our communications is vital for building trust and rapport, enabling proactive resolution of potential disputes, and ensuring that when the going gets tough for your customers, they communicate openly and prioritise your invoices.

By combining the efficiency of automation with the personal touch of human interaction, you can strike the right balance in credit control, ensuring steady cash flow while nurturing valuable relationships with your clients.

At the end of the day, human beings pay your invoices. We’re all different but hardwired with the same need for some sort of social connection.

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