Responsive Credit Control
The credit control function you already know and love
Smile software has a very powerful credit control capability which automates the process of credit control collection – also know as dunning. Smile’s credit control collection process:
- will automatically identify accounts that are overdue and categorise them into treatment levels such as “Overdue”, “1st Warning”, “2nd Warning”, “Suspension”. You can configure your own treatment levels.
- will automatically take actions at each change of treatment level such as:
- issuing an email with an attached invoice or statement
- setting a feature on the account’s services. Common examples include shaping, wall-gardening and barring
- raising a ticket
- can report overdue accounts grouped by their treatment level and associated with the most recent collection note, as might be set by your collections officer
Credit control also defines account terms. Terms can include when invoices are due and when payments are to be scheduled.
The following graph shows a real example of implementing credit control and the resulting reduction of outstanding invoices for a Smile user. In less than 2 months overdue invoices were reduced from approximately 60% of total unpaid invoices to less than 30%.
Responsive credit control – credit control amped up
Coming soon in Smile 6.0 we’ll be introducing responsive credit control. This adds an additional dimension above the existing credit control. Using responsive credit control you can tell Smile to change the credit control collection terms for an account based on their payment performance.
Responsive credit control is configured using simple rules. For example:
- The default is to use the “Good Payer” credit control terms
- An account is changed to “Missed” credit control terms when the rule “At least 1 invoice(s) owing $2.00 or more 1 day(s) after the due date in the last 6 month(s)” is met
- An account is changed to “Repeat Offender” credit control terms when the rule “At least 2 invoice(s) owing $2.00 or more 1 day(s) after the due date in the last 2 month(s)” is met
Accounts can be assigned stricter or more accommodating credit control terms based on the responsive credit control rules. For example you may assign good payers to credit control terms that are relatively lenient. However, if they start to become less reliable the customer account can be moved to terms that are stricter. The customer would stay on the stricter terms until their payment performance improved over a specified period of time.
If you are not currently using credit control this is a great opportunity to automate your business processes. This will save staff time, ensure consistent communication with your customers and will improve your cash flow. If you are currently using credit control, responsive credit control will give you a valuable edge.