Credit Control

Credit control is the process a business runs to manage the credit it extends to customers - setting payment terms, monitoring outstanding invoices, and running a structured sequence to collect overdue amounts before they become bad debt. It sits between raising an invoice and receiving payment, and the discipline applied in that window has a direct impact on cash flow, working capital, and the business's ability to pay its own suppliers and staff on time.

The Components of Effective Credit Control

Credit control starts before the invoice is raised. The first component is the credit decision itself: agreeing payment terms in writing at the point of onboarding a new customer, confirming the billing contact and purchase order requirements, and setting a credit limit for customers whose payment history is unknown. Offering 30-day terms to a new customer before they have placed a single order is a common point where bad debt risk is introduced.

The monitoring component is the ongoing process: tracking which invoices are current, which are approaching their due date, and which are overdue. Standard aging buckets - current, 1 to 30 days overdue, 31 to 60 days overdue, 60-plus days - give a clear picture of the receivables position at any point.

The chase sequence is the structured response to each aging bucket. A day-three email after the due date has passed, a phone call at day seven, a formal notice at day 14, and escalation to a director or debt recovery process at day 30 is a typical structure. Each touchpoint should reference the specific invoice number, amount, and original due date. Generic messages are less effective and easier for customers to defer.

When Credit Control Breaks Down

The Atradius 2024 report on US B2B payment practices found that only 42% of US invoices are paid on time, with 50% currently overdue and 8% written off as bad debt. Analysis of QuickBooks UK data found that 14% of small to medium-sized businesses spend five or more hours per week chasing overdue payments - more than 260 hours per year on a task that structured credit control processes can significantly reduce.

The most common failure points are: no written payment terms at the point of sale, invoices sent to the wrong contact, no systematic follow-up schedule, and escalation that only happens when the overdue amount becomes critical rather than at the first missed date. Each failure extends the average collection period. For businesses in construction, AV, or promotional merchandise where margins are tight and order values are material, even two extra weeks on a $25,000 invoice represents a meaningful cash flow impact.

Zigaflow tracks every invoice against its due date, with overdue accounts visible at the job level. The Mentions feature enables internal escalation without switching between systems when a payment chase requires a team member to act.