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Good credit management is an important business strategy to maintain cash flow and stable finances.

A cornerstone of managing credit is not only making sure an invoice gets paid, but gets paid on time. With the holiday season quickly approaching, some industries may find delays occurring in settling customer debts.

Efficient credit management entails ensuring timely payment of invoices, which assumes critical importance during the holiday season when delays are likely to occur.

Prepare Your Customers

Ensuring customers understand their payment terms from the start is the first step in training them to keep track of outstanding invoices and payment due dates.

Keep Detailed Records

Businesses should keep all customer records, such as payment term agreements, customer limits and outstanding sales to date.

Follow Up Regularly

Taking proactive measures, such as initiating follow-up procedures promptly after a payment becomes overdue, can significantly expedite the payment process. Additionally, it is crucial to identify the correct point of contact for payment matters, as this individual may differ from the person you were previously liaising with during the transaction process.

Implement Payment in Full

Most businesses adopt this policy in regard to payment procedures. This way, the customer has a total amount to pay by a concrete due date. Sometimes making it easier for the customer by staggering payments and due dates can confuse and delay payments even further.

Upfront Payments

For labour and time-intensive work, some businesses ask for part-payment or deposit up front. This works as a way of showing that the customer is financially committed to the project. It also allows a business to better manage cash flow, knowing that there won’t be months at a time when no payments are coming in because of works in progress.