The best way to win at collections is to never need them.
Strong credit controls protect your business from bad debt, strained relationships, and sleepless nights.
They turn guesswork into discipline — and discipline into predictable cash flow.
In this article, Paul Boyce, a commercial collections expert with over 30 years of experience, outlines how to design credit controls that reduce risk, encourage timely payment, and preserve customer trust.
Why Credit Controls Are Essential
Every business extends credit — but not every business manages it well.
When credit policies are unclear or inconsistently enforced, even good customers can become collection problems.
Effective credit control policies:
- Define who qualifies for credit and how much.
- Set terms and limits aligned with customer reliability.
- Enforce consistent follow-up on overdue invoices.
- Protect both revenue and reputation.
“You can’t collect what you never controlled.”
The Pillars of Effective Credit Control
1️⃣ Credit Policy
A formal, written policy is your first line of defense.
It should clearly define:
- Application and approval process
- Maximum credit exposure per account
- Required documentation (e.g., financials, trade references)
- Review and renewal schedule
How Smart Credit Applications Strengthen Debt Recovery
2️⃣ Risk Assessment
Use objective criteria to evaluate creditworthiness — not just sales relationships.
Combine credit reports, payment history, and financial statements.
3️⃣ Monitoring and Alerts
Use software or CRM reminders to flag aging balances.
Automation ensures no account drifts into neglect.
Using Technology to Improve A/R Recovery
4️⃣ Escalation Protocol
Define when and how delinquent accounts move to collections.
Consistency avoids emotional or inconsistent decision-making.
How to Work Effectively With a Collection Agency
5️⃣ Regular Review
Markets change, and so do your clients.
Reassess credit limits and policies annually or after any major client event.
Common Credit Control Weaknesses
| Weakness | Risk |
|---|---|
| No formal approval process | Unvetted customers receive open credit |
| Ignored payment history | Repeat offenders stay on terms |
| Lack of written procedures | Staff make inconsistent decisions |
| No escalation thresholds | Overdue accounts age too long |
“Weak controls turn ordinary sales into long-term losses.”
Expert Insight from Paul Boyce
“The companies with the fewest collection problems aren’t the most aggressive — they’re the most consistent.
Credit control is quiet discipline that pays loud dividends.”
🔗 Related Articles
- How Smart Credit Applications Strengthen Debt Recovery
- Using Technology to Improve A/R Recovery
- How to Work Effectively With a Collection Agency
Key Takeaways
- Preventive credit control policies reduce future collections.
- Objectivity and consistency build credibility and protect cash flow.
- Automation reinforces discipline and accountability.
- Regular reviews keep your risk aligned with reality.
Need Clarity Before You Escalate?
Get a confidential review with Paul Boyce, Commercial Collections Expert.
If late payments have become routine, I can connect you with a licensed commercial collection agency that handles these matters ethically and effectively.