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In any business, especially in the recruitment industry, efficient credit management and control are not just best practices—they're necessities. The aim is to ensure that you get paid for your services in a timely manner. This guide will take you through a strategic approach to manage your credit effectively and ensure that your cash flow remains healthy.

Importance of Invoicing

Sending invoices is more than a clerical task; it's the first step in your credit management process. An accurate and prompt invoice not only sets the payment expectation but also serves as a legal document in case of disputes.

Payment Confirmation Steps

Send an Initial Invoice and Follow Up

Upon completion of a service, send an invoice to the client immediately. Follow up with an email to confirm that they have received the invoice and understand the payment terms.

Make a Confirmation Call

If the client does not respond to your initial email within a reasonable time, escalate the issue by giving them a call. Confirm the payment date and ensure they know the payment methods available.

Immediate Follow-up (7 Days After Due Date)

If payment is not received by the due date, send a reminder email or make a phone call to gently remind the client.

Escalation to Management (14 Days After Due Date)

If there is still no payment, escalate the matter to your management team. Have them send an email or make a call to add weight to the urgency.

Written Request (21 Days After Due Date)

If the payment is still pending after three weeks, send a formal written request for immediate payment. This serves as a preliminary step before taking legal actions.

Legal Steps (28 Days and Beyond)

Send a solicitor’s Letter Before Action 28 days after the due date, giving the client 14 more days to make the payment. If the invoice is still unpaid after six weeks, consider issuing court proceedings.

Legal Considerations

It's crucial to understand the legal implications of credit management. From issuing court proceedings to understanding late payment fees, each step has its own set of legal rules that you must follow.

Effective credit management and control are integral to maintaining a healthy cash flow. By following these structured steps, you not only ensure that you get paid but also minimize the time and effort spent on chasing payments.

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