Late payments can strangle your cash flow but the problem often starts long before the invoice is overdue. The key to getting paid on time isn’t just chasing debt it’s managing credit from the start.
What Is Credit Management?
Credit management is the end-to-end process of deciding who gets credit, how you invoice them, and what you do if they pay late.
It includes:
- Setting clear payment terms
- Evaluating customer risk
- Monitoring receivables
- Following up unpaid accounts
- Taking action when accounts become overdue
- Done right, credit management becomes a natural part of your financial workflow not a last-minute scramble to collect what’s owed.
The Hidden Cost of Poor Credit Control
Without structured credit management, you risk:
- Unpredictable cash flow
- Strained supplier payments
- Lost time chasing money
- Legal disputes or write-offs
- Reputational damage
Worse still, it can put your business survival at risk especially in tight economic cycles.
5 Steps to Smarter Credit Management
Set and Communicate Terms Upfront
Agree on payment terms before starting any work. Include these clearly on every quote, invoice, and contract.
Check Customer Creditworthiness
Use basic credit checks or trade references for new clients. Be cautious if they have a history of slow payments.
Invoice Immediately
Don’t wait until “month end.” The faster you invoice, the faster you get paid.
Follow Up Consistently
Send reminders before the due date and escalate with structured follow-ups if payment isn’t received.
Know When to Escalate
If your internal reminders aren’t working after 30 days, bring in a tool like iCollect to escalate automatically and maintain professionalism.
How iCollect Supports Credit Management
iCollect doesn’t just collect overdue invoices it enhances your entire credit management cycle.
Here’s how:
- Automated debt collection agency communication email & SMS reminders
- Easy tracking of payments
- Seamless Xero integration
- No commissions or hidden fees
It’s designed for New Zealand businesses that want structure without complexity.
Smart credit management isn’t about being strict it’s about being consistent, clear, and proactive. By taking control of your credit process, you’ll boost cash flow, reduce overdue invoices, and create healthier client relationships.
