One of the concerns I hear regularly from business owners about credit control is that they don't want to upset their customers.
I understand why. You've worked hard to build a good relationship, you want them to come back and buy from you again, and the last thing you want is an awkward conversation about money undoing all of that.
So an invoice becomes overdue and you give them a few extra days. Then perhaps another week. You send a very gentle email because you don't want to sound pushy, and when there's still no payment, you find yourself wondering how long you should leave it before trying again.
Before you know it, an invoice that was supposed to be paid in 30 days has been outstanding for 60 or 90.
But asking a customer to pay an invoice they've agreed to pay shouldn't damage a good business relationship. How you handle that conversation is what matters.
Credit control doesn't have to be confrontational
There is a big difference between professional credit control and immediately sending a threatening email because an invoice is a few days overdue.
Most of the conversations I have with customers aren't confrontational at all. I'm checking that an invoice has been received, finding out when it's scheduled for payment and dealing with anything that might be holding it up.
Sometimes there's a genuine problem. Perhaps they need a purchase order, the invoice needs to go to somebody else or there's a query that needs resolving. Sometimes the customer simply hasn't got around to paying it yet.
The point of following up is to find out which situation you're dealing with and keep the payment moving.
You can be friendly and professional while still being clear that payment is due. Those two things aren't mutually exclusive.
Your payment terms are part of the agreement
When you agree to provide a product or service, payment is part of that arrangement.
If your terms say an invoice should be paid within 30 days, expecting payment within those 30 days isn't unreasonable. You've delivered your side of the agreement and you're asking the customer to do the same.
I think this is where the emotional side of credit control can sometimes get in the way, particularly for small business owners who have personally built relationships with their customers.
It can feel very different saying, “How are things going?” to the same person you've previously had coffee with and saying, “Your invoice is now overdue.”
But the relationship hasn't suddenly stopped being a business relationship because money is involved.
In fact, being clear and consistent about payment can make those relationships easier. The customer knows what your terms are, knows that overdue invoices will be followed up and knows what to expect from you.
Inconsistency can create more awkwardness
Ironically, avoiding the conversation can make it much harder when you eventually have to have it.
If you've allowed a customer to pay 30 days late for the last six months without saying anything, and then suddenly decide you need them to pay on time, they're going to notice the change.
From their perspective, paying late may have become the accepted way the relationship works.
This is one of the reasons I prefer credit control to be consistent from the beginning. A polite reminder before or around the due date and appropriate follow up afterwards means you aren't suddenly appearing three months later with a much firmer email because your own cashflow has reached breaking point.
It also removes some of the emotion. You're not chasing this particular customer because you're annoyed with them. You're following the same process you use for your accounts generally.
Good credit control can actually improve the customer experience
This might sound strange when we're talking about chasing money, but good credit control isn't only beneficial to the supplier.
Customers can have problems with invoices too. Perhaps something doesn't match their records, they're waiting for information or the invoice has been sent to the wrong department.
If nobody follows up until the invoice is significantly overdue, those issues can sit unresolved for weeks.
Regular communication gives the customer an opportunity to raise a problem early and gives you the opportunity to fix it.
That's much better for the relationship than repeatedly sending automated reminders about an invoice the customer has already told somebody they can't process.
It also means that when there isn't a genuine problem, both sides know exactly where they stand.
Being professional doesn't mean accepting every excuse
Protecting a customer relationship doesn't mean you have to accept endless delays.
If somebody promises payment on Friday and it doesn't arrive, follow it up.
If they tell you every week that payment is being processed but can't give you a date, ask for something more specific.
If they stop responding altogether, change your approach rather than continuing to send the same polite reminder indefinitely.
You can do all of those things professionally.
There will occasionally be customers who react badly to being asked to pay. In those situations, I'd question whether avoiding the conversation really protects the relationship anyway.
A good commercial relationship has to work for both businesses.
Think about the relationship you actually want
Most businesses don't want customers who only stay happy as long as nobody asks them to pay on time.
You want customers who value what you provide, communicate when there's a problem and honour the payment terms you've agreed.
That doesn't mean every invoice will arrive perfectly on time. Things happen, queries arise and occasionally somebody simply forgets. Good credit control allows for that.
What it shouldn't do is make late payment the norm because you're worried that following up will make you look difficult.
I've spent years having payment conversations on behalf of businesses, and the aim has never been to damage the relationship. Quite the opposite. The best credit control is professional, consistent and focused on getting the issue resolved while preserving the commercial relationship wherever possible.
At INcharge, that's how we manage the process for our clients. We deal with customer queries, follow up invoices, track payment promises and keep communication moving so the business owner doesn't have to choose between maintaining a good relationship and getting paid.
Because asking to be paid for work you've already done isn't unreasonable. It's part of running a business.
Find out more about our outsourced credit control services and pricing.