Credit management refers to the process of granting credit to an individual or a company, setting the terms it is granted on, and then recovering the credit when it is due. It is of vital importance that every company, or credit provider, has a strategic and effective credit management policy in place to reduce the chances of any financial issues arising from poor credit management. In fact, one such way to ensure proper credit management is to utilise the services of a credit management agency. Not only will the agency have far more experience in managing credit, but they will also assist in turning your owed debts into paid deals. (Information source: https://www.accountability.co.za/about-us)
In fact, credit management involves a lot more than simply reminding customers or clients to pay you on time. It is a fulltime job and requires your full attention, especially if you wish to reduce the chances of losses being made, as well as improve the cash flow within the company.
If you were to utilise a professional and reliable credit management agency, you would be benefitted in the following ways:
1. You would reduce your overhead costs
By working with a credit management agency, proper credit management would be enforced. Thereby, reducing your costs. Rather than hiring a highly experienced credit manager fulltime, you can make small, monthly payments to a credit agency and have an entire team assisting with your credit management. Not to mention, this would save your team time, allowing them to focus on more important business activities.
2. Your company’s cash flow would be increased
When you hire a credit management agency, your recovery rate will be increased, and the time of outstanding collections, as well as your collection costs, will be reduced. Thereby, assisting with an improvement in your company’s cash flow. In fact, the agency can even advise you on how to improve your overall cash management system.
3. You would obtain quick and complete recovery
The professional and experienced individuals that work at the credit management agency you utilise are specialised in credit management and accounts receivable management. Therefore, they will have far more industry experience than any of the individuals in your business. As such, should your organisation be met with any hurdles or obstacles during debt recovery, the agency will be able to assist with their several strategies.
4. You would have more time to focus on other core business functions
By hiring a credit management agency, you have more time to focus on other more pressing core business functions. Not to mention, you will be able to maintain your brand image. There is nothing worse than having to chase bad payers, as this often leads to highly uncomfortable situations.
5. You would be working with experienced specialists
As mentioned previously, a credit management agency will have a team of highly experienced and skilled individuals that have years of training in the industry. These specialists will be far more suited to the task and can produce faster results more efficiently.
