Credit control is the job nobody puts their hand up for. Sales will not take it, because it cuts across the relationship they are trying to build. The bookkeeper picks it up by default, on top of everything else. In the end the owner does it personally, usually after hours. That arrangement works up to a point, and then it stops working.
The signs that it is time
- You find out an invoice is late when you look at the bank balance, not before.
- You could not say right now how many invoices are more than thirty days overdue.
- Your real payment terms run more than a fortnight beyond what you agreed.
- Chasing happens in bursts, when cash gets tight, rather than week in week out.
- You hold off chasing certain clients because they matter too much and you do not want the friction.
Three out of five is usually enough to justify handing it over. It has little to do with the size of the company and everything to do with how many accounts need watching and how much time there genuinely is to watch them.
The three options
Keep it in-house
It looks like the cheapest option and it is usually the dearest. The time comes out of other work, the chasing depends on one person being free, and it stops the moment the business gets busy. Workable below about ten accounts.
Hire someone
An experienced credit manager costs well over €50,000 a year fully loaded, before you count recruitment, induction and the risk of them leaving. That makes sense at volume, typically several hundred live accounts. Below that you are paying for a full-time role you cannot fill with full-time work.
Outsource it
You are buying a skill and a rhythm, not a salary. The cost is known up front, there is no recruitment and no employment risk, and the scope moves with your accounts receivable. For most companies with somewhere between ten and a hundred and fifty live accounts, this is the option that fits.
Worth separating. Outsourcing your credit control is not the same as putting a debt with a collection agency. The first is continuous work done early, so the invoice gets paid on its due date. The second starts once payment is already in doubt, and it costs you a percentage of whatever comes back.
What to check before you choose
Whose name your clients see
This is the point that matters most and the one that gets misread most often. White label comes at two levels. In the usual version, messages are written in your name and your tone of voice but go out from the provider's address. Your client sees a third party acting on your instructions, which reads as a company that has got organised. In the full version, the provider uses an address on your own domain and no outside party is visible at all.
Either way, the provider speaks in your name rather than its own. That is the distinction that counts. A firm writing under its own banner sends your client a completely different message, which is that the debt has gone to litigation.
Who receives the money
Get it in the contract that payments continue to go straight into your account. A credit control provider has no business touching your cash. If funds route through a third party, you have taken on a counterparty risk for no reason at all.
What lands on your desk each month
A report you can actually read: the position on every account, what came in, what payment dates have been promised, and what is holding the rest up. A provider who will not show you a sample report before you sign is telling you something.
Insurance
Ask for the professional indemnity certificate, with the activity it covers and the limit of indemnity. Any established provider will send it over without being chased.
What about the client relationship
This is the concern that comes up first, and it is a fair one. In practice, though, relationships are damaged far more often by nobody getting in touch than by somebody doing so. A client contacted on the due date, politely, by someone who knows the account, does not feel got at. They feel dealt with professionally.
What does damage the relationship is two months of silence followed by a tense phone call when your cash runs short. Handing the job over takes the subject out of the sales conversation entirely and gives it to someone who does it for a living.