Many businesses think credit control simply means sending reminder emails when invoices are overdue.

In reality, effective credit control is a structured process. It combines organisation, clear communication and relationship management.

A good process helps you:

• Get paid on time

• Reduce overdue invoices

• Maintain good relationships with your customers

Below is a simple walkthrough of how to set up a practical credit control process and the key steps that keep it running smoothly.

Step 1: Start With Clear Visibility

Before chasing any invoices, you need a clear overview of what is outstanding.

Create a simple tracking system. This can be a spreadsheet or reporting from your accounting software. The key information to track includes:

• Customer name

• Invoice number

• Invoice value

• Due date

• Agreed payment date (if one has been given)

• Notes from previous conversations

This gives you a quick view of your debtor ledger and helps you prioritise which invoices need attention.

Tip

Always check that the invoice contains the correct purchase order number if the customer requires one. Missing purchase orders are one of the most common reasons invoices go unpaid.

Step 2: Send Monthly Statements

At the start of each month, send a statement to customers showing all unpaid invoices.

Statements act as a gentle reminder and often prompt payment without the need for chasing. They also give customers the opportunity to request copies of invoices if anything is missing.

Tip

Keep the message simple and helpful. For example:

“Please find your monthly statement attached. Let us know if you would like copies of any invoices.”

This keeps communication professional and collaborative.

Step 3: Review Upcoming Invoices

Good credit control starts before an invoice becomes overdue.

Each week, review invoices that are due within the next seven days. For larger invoices or customers who tend to pay late, sending a polite reminder before the due date can help prevent delays.

This step is often overlooked, but it can significantly reduce overdue balances.

Step 4: Use Structured Reminder Emails

Once an invoice becomes overdue, begin a structured reminder process.

A simple sequence works well:

• Day 1 overdue – Friendly reminder

• Day 5 overdue – Follow up reminder

• Day 10 overdue – Request confirmation of a payment date

The aim of these emails is not to pressure the customer, but to open communication and confirm when payment will be made.

Step 5: Pick Up the Phone

If there is no response to reminder emails, the next step is a phone call.

A phone conversation can quickly solve issues that emails cannot.

During the call you can:

• Confirm the invoice reached the correct person

• Check for any queries or disputes

• Ask for a payment date

• Update incorrect contact details

The tone should always be friendly and collaborative. The goal is to resolve problems, not damage the relationship between the customer and your client.

This is one of the biggest gaps in automated credit control systems. Software can send reminders, but it cannot build relationships or resolve issues through conversation.

Step 6: Escalate When Needed

If communication stops and payment is still not received, the situation may need to escalate and may include options such as:

• Sending a final escalation email

• Offering a payment plan

• Warning of service restrictions

• Changing future payment terms

• Applying late payment interest

• Sending a Letter Before Action

Escalation is usually considered once invoices reach 30 to 45 days overdue with no engagement, as invoices at this stage carry a higher risk of not being paid.

Step 7: Monitor Results

Credit control should always include reporting and regular review.

Key metrics to monitor include:

• Total overdue value

• Number of overdue invoices

• Debtor days

• Weekly or monthly changes in overdue balances

Regular reporting helps identify patterns and improve the process over time.

Why Credit Control Is Not Just Automation

Many accounting systems now offer automated chasing.

Automation can be useful for sending reminders, but it has limits.

Software cannot:

• understand the relationship between you and your customer

• adapt the tone depending on the situation

• pick up the phone and resolve issues

• investigate missing contacts or incorrect emails

• agree payment plans through conversation

Effective credit control combines structured systems with human communication.

The process creates consistency. The human element builds relationships and solves problems.

Both are essential if you want invoices paid on time.

Final Thought

Most overdue invoices are not caused by refusal to pay. They are usually the result of missed emails, invoice queries or internal delays.

A clear credit control process helps you identify these issues early and resolve them before they become serious problems.