“Best Practice” for Effective Credit Control

1. Order stage: Ensure sales team are aware of credit policy, use credit application form, credit check on each new customer, request personal guarantee for doubtful customers, set a "minimum order, check before giving credit, assess credit insurance if needed, set credit limit for each new customer, conduct regular credit checks on main customers, documented term of trade, specify interest charge on late payment, define procedures to deal with disputes, specify credit terms, agree payment terms in writing, set each unique account code for customer, confirm company detail information (trade name, address, VAT, company registration number, PIC), record payment due date, check out frequency of invoice payment, specify the most appropriate payment methods. 
2. Invoicing: check invoice accuracy, include detail information on invoices (payment detail, order detail, total due amount, due date for payment etc.), issue invoice immediately after delivery, make sure delivery match with order, confirm receipt of invoice, issue monthly statement.
3. Collection: categorize customer (good, average, bad), allocate payment vs outstanding, contact main customers before due date, chase overdue payment asap, conduct weekly aging report analysis, prioritize collection activity, levy charge for bounced cheques, set up dunning rules/procedures (email, call, letter, visit)
4. Recovery: stop supplying when payment has not been paid, pass to debt collection agency, pursue law execution.
5. Controlling: have documented procedure for handling and resolve disputes, establish credit control system, review account check-up on monthly basis, regular meeting with sales team, ensure credit control and sales team are well trained.