How to build a successful credit control team

09/05/2017

The ongoing struggles with late payment will no doubt have prompted many companies to consider whether the time has come to integrate a credit control department into the business for the first time.

We recently highlighted five things to consider when it comes to making this decision.

Yet knowing it’s the right strategy and actually going ahead and building (or hiring) a team that’s successful at improving collection times are two very different things. The trick is finding the right blend of knowledge and expertise that maximises results at the right cost to your business.

For instance, there’s no point hiring five credit controllers if you’re only raising 10 invoices per month. Similarly, you can’t expect a single person to handle a generic, business-to-business ledger of more than 500 customers whilst adhering to credit control best practice.

And when it comes to identifying the right people for your business, there’s much to consider here too, as credit controllers come from a variety of backgrounds.

Some have started at the bottom, working their way up to more senior positions in large organisations with extensive training behind them. Others have been thrown in at the deep end at smaller companies and have had to learn on the job.

The key is to identify what would work best for your company, so here are three options for businesses to get a successful credit control team up and running:

1. Hire experienced credit controllers

Recruiting people with an extensive background in credit control is most businesses’ first port of call when it comes to building a new department.

The biggest advantage of this approach is that your business will be able to benefit from their existing skillset, based on the on-the-job experience and dedicated training they have previously received.

A credit controller’s skills are usually transferrable, so it won’t take them long to adapt and get used to your industry and way of working.

You can then gain ideas and suggestions from them on ways to improve and strategies to employ – for instance, credit checking customers, using account opening forms or contacting customers at different times for maximum impact.

This can be a more costly approach as experience can mean a higher wages, but by being clear about the salary on offer in your job advert you’ll soon have a good idea of the sort of candidates you’ll be able to attract.

2. Upskill existing staff members

You may find that you have someone with the right attributes for credit control already within your organisation (if you’re not sure, take a look at these 7 skills all credit controllers need).

This is where it can pay to recruit from within. Existing staff members already know your company, your customers and how you do things, while you know their reliability and how well they fit in.

It’s also a much faster way to get someone started on your credit control, as advertising a vacancy, interviewing and waiting for notice periods to be served can take time.

Crucially, it also saves the company the cost of recruitment – however, it is important to offset this against the cost of training that the employee will require. You can’t expect someone with no credit control experience to come in and pick it up immediately; they’ll need time and investment to pick up the skills and best practice to do a good job.

This lack of experience is probably the biggest disadvantage of this approach. As credit control is such a specialist and demanding role with results needed instantly, it can be a risky strategy to appoint someone with no credit control background.

But should they have a mentor within the organisation, someone who’s been there and done it and is happy to pass on their knowledge whilst also coping with the demands of the job, this could be a sensible option.

3. Outsource the entire function

Sometimes the easiest and most effective approach to credit control is to outsource the entire function to a specialist agency.

The main benefit to this approach is that the agency will have extensive experience and adhere to all the best practices when employed by you. From contacting customers at the right time to using the right blend of emails, phone calls and letters, their approach will bring results – which is ultimately the number one requirement for any credit control strategy.

Outsourcing can also prove to be a far more cost-effective option than recruiting. With in-house staff, the overheads that go beyond their basic salaries can be a challenge, such as recruiting and training, plus there are the complications caused by holidays, sickness and maternity/paternity leave.

Credit control agencies will be unaffected by all of this and ensure that any internal absences don’t affect their activity on your account. Similarly, the fee agreed is typically based on a ‘per debtor’ basis, so it’s tailored to the number of customers you have on your sales ledger.

While it may result in an element of control being passed across, the best credit control agencies will always be mindful of the importance of your customer relationships and simply work as an extension of your team to bring the desired results for your business. Take a look at the reasons, risks and rewards of outsourcing your credit control.

To discover how Hilton-Baird Collection Services can provide a fully outsourced and confidential credit control service, contact our award-winning team on 0800 9774848 or request a call back. Alternatively, read our blog on how to choose a credit control agency or download our credit control brochure.