Credit Control – A Checklist

Credit Control – A Checklist of the 9 Pillars of a Credit Policy

If you have ever asked the question ‘what is credit control and why is it important’, this article should help you answer that and the fundamental basics which you must start to implement in your business.

Let’s start with the nine basic pillars of credit control policy. The credit control process starts as soon as you receive an enquiry or an order.

Pillar One

Enquiry or order, this is the beginning of your customer’s journey and your credit process.

Pillar Two

The ‘quote’ or ‘acknowledgement of order’. This can be in the form of a tick box on a website, an automated email or a text message – each business needs to use the medium that works for it. Many will use all available options, some just the one. What is important is you prepare this internally and do not do anything with it until:

Pillar Three

Complete a new customer account form. It is hugely important to know who your customer is, where they are and how to contact them. This is just the basics … but, get this bit wrong and the whole process can fail. Creating this form will prove beneficial time and time again as a business grows. KYC = Know Your Customer; who makes the payments, where should you send the invoice, are they a limited company, a sole trader or a partnership. Do you know how important a date of birth can be when tracing a bad payer? If they are VAT registered, always obtain their VAT number.

Pillar Four

Credit checking. Be very careful as you may need the consent of sole traders, partnerships and certainly consumers to carry out a credit search on them. This can be covered on the account form and only once consent is obtained can you proceed.

Limited companies and PLC’s do not have to give consent and there is a whole raft of information available for you to view free of charge. Companies House, LinkedIn, Facebook, Google and websites will all help you verify they are who they say they are. Credit Scoring agencies will offer a guide to whether they are good for any credit and what limits they recommend. Remember, don’t give more credit than your business can afford to lose.

When Pillars three and four are completed, you can set a limit and decide whether to proceed with the order or quote.

Pillar Five

Send your terms and conditions (T&C) and define how they should pay. State what you will do for the amount you are giving credit for, when it will be done or delivered and where. A good set of terms and conditions are an essential investment and are the foundation stone than can be referred back to when disputes arise. This is where you are proposing your contract.

Pillar Six

Allow a period of time to receive their purchase order or acknowledgement of quote and acceptance. Be aware of them advising their own terms or that that they won’t accept yours. If you are happy to proceed on their terms proceed if not re-send yours with a stated deadline for acceptance. If they fail to do so then your T&C’s stand.

Pillar Seven

Provide the service or deliver the product. Obtain written acceptance of receipt of goods or the services when completed.

Pillar Eight

Invoice as agreed with a reminder of payment terms and where to send payment

Pillar Nine

Payment is made in a timely fashion.

Between pillars eight and nine there is your credit control activity.

Get these pillars right and with the right credit control process behind them, your cash flow will improve, disputes will decrease, late payments will be reduced and the need for debt recovery will be minimised.


Having a solid set of credit management procedures will prevent a lot of debt issues but you need to follow them to the letter – if you’re struggling with credit control and debt collection then find a professional partner who can support your business.

Credit management guidance from Yorkshire Powerhouse

Have you any questions?

Here at Yorkshire Powerhouse, we’re happy to help as much as possible – is there anything else we can do to help you, do you have any further questions or can we help introduce you to an expert – please let us know:

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