Placing a candidate on a permanent or contract basis can be the amalgamation of days, weeks or even months’ worth of work for a recruiter and means that the agency is almost in sight of the final reward… the fee! However, until the money is in the bank for the invoice raised, this profit remains elusive, so it is advisable to ensure that the back-office team are using every resource to guarantee payment within the agreed contractual terms. Here are my 5 tips to improve the credit control of your invoices that will (hopefully) ensure the client pays within terms: –
ENSURE THE RECRUITER HAS ASKED ABOUT THE INVOICING PROCESS
The first contact with any client is with the recruiter making the placement. It is advisable that when they have made the placement, they ensure that as part of their closing process, they ask how invoices are processed and paid. In most cases, invoices are sent and the payment will be made within terms but in some circumstances, there can be an array of procedures and processes that need to be followed before an invoice is paid. If this is addressed at the start then it can speed up the payment process.
BUILD AN INITIAL RAPPORT WITH THE ACCOUNTS PAYABLE TEAM
Once a placement is made and the first invoice has been sent, it is a good idea for the credit control team to get in touch with the client as early as possible to introduce themselves to the relevant person in Accounts Payable. This is also a good point to check that the invoicing process has been followed and that the first invoice will be on the next payment run. This initial call can provide the valuable information such as payment run deadlines, understanding internal dynamics and ensure that if there is an issue it has been dealt with early on.
VERIFY THE INVOICES WITH THE CLIENT WITHIN 7 DAYS
Once the invoicing cycle for each client has been completed, it is a good idea for any email sent to Accounts Payable with a copy of an invoice to request verification that the invoice has been received (can be done with delivery and read receipts), that the invoice is correct and that it will be paid within terms. Stating this on the email will get some responses which in turn provides a form of acknowledgement before any chasing needs to be commenced. Any non-responses can then be followed up within 7 days.
SEND STATEMENTS ON A REGULAR BASIS
Sending statements to the clients of current and overdue invoices is an easy way to ensure that the client has not missed any invoices during processing. These can easily be produced from the accounting software and sent direct to the client. As the statement will list all invoices due for payment, the client can double check this against their own accounting system and notify the agency of any missing or incorrect invoices.
CHECK WITH THE CLIENT THAT THE INVOICE IS ON THE PAYMENT RUN
If the credit control team have an earlier email with a promise to pay, then it is advisable to contact the accounts payable team just before the payment run is due to ensure that the invoice will be paid. This provides an additional opportunity to ensure that any payments that were accidently omitted could be rectified and the missed invoice added on.
IN SUMMARY
Whilst these tips may seem obvious, many credit control teams will not be able to chase every invoice in this way and clients can often put barriers up when it comes to making payments which in turn can cause delays.
There can also be barriers such as online portals, PO number delays, payments by cheque, specialist formatting of invoices, etc which can also cause delays. Therefore, it is imperative that credit control teams are in communication with the client accounts payable teams to ensure prompt payment.
We work with internal credit control teams to come up with an effective dunning cycle for the chasing and payment of client invoices. MAYACHI implements effective monitoring and reporting to ensure that the Directors know the effectiveness of the credit control team and if there are any clients that could cause an effect on future cashflow.
If you’re struggling to get your clients to pay within terms, book a call with us and we will review your current process and advise what changes you need to make. Book now.
