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Cashflow Management - Credit Control

Outsourced credit control: get paid faster and stop manually chasing invoices

March 24, 2023 | 6 minutes

Credit management is non-negotiable for many SMEs, but it comes with several challenges. Perhaps you’d prefer to outsource it because:

Credit control is too big a task or takes too long.
You might not be ready to hire a full-time credit controller but you want someone else to look after your credit control.
You aren’t sure how best to set up effective or efficient systems, or the systems you have aren’t working as well as you’d like.
You’re dealing with a lot of bad debt due to customers going bust.

Note: Satago is a credit control tool for SMEs and credit controllers who want to set up an efficient credit control system. With Satago you can set up multiple invoice reminder templates, send grouped reminders and a lot more. Get started today with our 14 day free trial!

How to outsource credit control

Now you’ve decided you’re looking for an outsourced credit control service, the next step is to consider the available options and how to get started.

There are multiple ways to outsource credit control:

Hiring a specialist freelance credit controller
Hiring a credit control agency
Using a credit control tool

Let’s look at each one in more detail:

Hire a freelance financial controller

Working with a freelancer is a great way to outsource credit control when you’re not able to employ someone. It’s also an option you might prefer if you’re a freelancer too.

If you’re new to credit control, working with a credit control specialist is useful, especially if you value an experienced opinion or someone who can help you set up your credit control policy and processes. They can also run credit control for you, and some follow up on unpaid invoices via both email and phone.

The easiest way to find a good freelance credit controller is often to ask around for recommendations. Alternatively, you could head to LinkedIn or Google to browse profiles and websites.

Work with an agency that specialises in credit control

An agency is another good option if you aren’t looking to employ a dedicated credit controller but still want to outsource.

Like freelancers, they can offer an expert opinion and help you set up policy and processes. They also chase up your outstanding invoices, with many offering both email and phone communications with your clients. Some agencies might also offer collections services and will help with debt recovery, debt collection and taking unpaid invoices to small claims court.

They might work on a rolling monthly basis if you need regular support, or alternatively, if you just have a few invoices to collect they can work on a project basis. Some agencies operate on a no-win-no-fee basis.

As with finding a good freelance credit controller, you might ask around for recommendations when looking for an agency, or you could see what comes up when you search online, then check their reviews. Also, you should check with your accountant or bookkeeper because credit control is increasingly being offered by those types of advisors.

Use a credit control tool

A third option is to use a tool to help with your credit control. It might not feel like outsourcing, but tools can provide a lot of the value of outsourcing at a fraction of the cost. Bringing in a tool is also useful if you already have a credit controller, but they want to do their job more efficiently.

Look for tools that allow you to template and automate emails. This will save you time, especially if you’re contacting people manually to chase invoices and acknowledge payments.

Using a tool might be a better option for those who have simpler needs and are confident in setting up good systems or are planning to work with someone to help them get started. Alternatively, pick a tool that is set up to work ‘out of the box’, with minimal input from you once you’ve integrated it with your accounting tool.

To get started, consider the features you want from a tool and do some research. You could also ask around to see if anyone you know uses a tool for this purpose that they’d recommend.

Satago is a credit control tool that allows you to set up custom invoice reminders, send grouped reminders and a whole lot more. Scroll down to learn more about what we do.

When to use an agency or a freelancer

One of the main benefits of outsourcing credit control to experienced people like an agency or freelancers is exactly that – their experience. This option is perfect if you don’t know where to start, or don’t have the confidence to set up your own systems.

Real life is inevitably messier than the ideal, and working with a human who’s able to think on their feet can help with overcoming objections, negotiating, empathising, and coming up with solutions.

For example, a credit controller could suggest that a customer pays a third of their outstanding amount this month, a third next month, and the final third the following month, which a tool alone wouldn’t be able to suggest.

Other reasons you might like to work with an agency or freelancer include:

You want as little as possible to do with credit control, so using a tool to help you be more efficient isn’t going to work for you.
Your credit control situation is complicated, and you need a bit more support with it.
You have a big book of customers and it’s hard to reconcile payments.
You’re nervous about chasing money and would like someone else to help.
You want some support from someone who can help with taking legal action.

When it might not make sense to work with an agency or freelancer

Working with a freelancer or agency isn’t right for everyone, as:

It can be costly if you use them regularly – some charge £300 – £700 per month for outsourced credit control.
It’s hard to track the ROI from paying a credit controller.
Giving control of your brand’s tone of voice and communication with customers to a third party can be daunting for some business owners, especially if you don’t have a well written set of brand guidelines.
It can be hard to make judgement calls on a sticky situation if someone isn’t part of your company and doesn’t know your client is involved.
A third party might be more likely to make an error as they don’t know your business and customer relationships as well as you do.

When to use a credit control tool like Satago

Using a tool like Satago is a good option if you:

Have relatively simple needs for your credit control.
Have a tight budget and can’t afford to hire someone, either by employing someone to work in-house or working with an agency/freelancer.

Want to retain control of the tone of your customer communications.
Want to have the difficult conversations yourself as the business owner. It’s harder for a third party to be involved in conversations where they’re pushing for payment as potentially other business can be lost.
Want to reduce the risk of errors from turning over credit control to a third party who doesn’t have the same insights and knowledge of your business as you do.
Already have an in-house credit control function and want to help them be more efficient.

Tools are ideal for repetitive and laborious work and they free up your or your credit controller’s valuable time to focus on credit control strategy. Satago also offers risk insights, which allow you to see how creditworthy a client is in real-time and can help shape strategy.

For example, with Satago you can set up invoice reminder templates for different groups of clients:

You can also send entire email flows, such as thank you emails, monthly statements and emails that are sent on specific days.

You can group reminders, so that your client has all invoices due in one email – instead of separate emails for each reminder.

You’ll also have access to “snippets” that will automatically calculate late payment fees, days overdue and a lot more.

A tool like Satago is an enhancement to the credit controller’s day, allowing them to be more efficient and giving them more to work with – by helping them decide who to follow up with first, for example.

The ideal scenario is a credit controller working with a tool like Satago. However, if that’s not an option, starting with the tool is a low-cost, low-risk way to get started. And if you need support with a sticky situation, then you can work with a specialist freelancer or agency.

How D&K used Satago to decrease their clients’ debtor book

When Daniel Edwards, founder of D&K Accounting, transferred his client base away from paper records and onto a cloud system when he started his business, he noticed one of his clients had a large debtor book of around £30,000 outstanding, with some overdue invoices up to 9 months old.

He needed a solution for this issue, so he went to the Digital Accountancy Show where he came across Satago. Daniel felt Satago “[fit] the gap perfectly”, as well as being competitive on price.

Daniel explained to his client how Satago could help their situation and they needed no more convincing to give it a go. They got together to discuss the wording to use in the email reminders and Daniel went from there.

He found Satago simple to set up and run: “We just linked it to QuickBooks and when invoices went past the basic due date, automated messages would go out. All communications and automated messages are in one place so it’s easy to keep track of what’s going on.”

Once Satago was implemented, the outstanding invoices were paid within 30-45 days, reducing the outstanding debtor book to £1,500.

“The client was really happy, due to them getting a £30,000 cash injection. They used these funds to expand, take on more staff and new computers, as well as going on holiday and fun stuff too!”

What else you can do with Satago

Satago’s credit control system helps you automate your process, making it more efficient and allowing you to focus on growing your business. But Satago is an all-in-one cash flow management platform that offers a lot more than just credit control.

Let’s look at some of the other ways Satago offers more value.

Easily cover cash flow gaps with invoice financing

If you’re waiting on overdue payments, you might need funding to allow you to cover a cash flow gap in the meantime. Invoice finance allows you to get the cash you need in a matter of days, instead of having to wait weeks.

We’re proud to do invoice financing a little differently at Satago:

No hidden fees: Since invoice finance has a reputation for hidden fees, we’ve made sure our pricing is clear and transparent. You’ll know up front the fees you’re paying: an arrangement fee, a monthly service fee, and an interest fee.

Get started with single invoice finance: There’s no need to finance all your invoices if you don’t want to, as Satago offers both single (also known as selective) and full (or whole book) invoice financing. We’re one of just two or three providers in the UK who offer both and we also make it easy for you to switch between the two options if, and when, you choose.
Credit control, invoice finance and risk insights in one tool: Most financing tools help with invoice financing or chasing invoices – not both. Satago also adds in the risk insights so you can easily see how creditworthy a potential customer is.

To manage your invoice finance within the Satago platform, head to the Finance dashboard. Here you’ll see:

Eligible invoices: This screen shows invoices that are available to finance. You’ll also see reasons why all your invoices might not be available:

The amount is too small
The invoice is due within 10 days
The invoice is too overdue
The company credit score is low
There’s not enough trading history with that customer

Pending invoices: This tab shows which invoices are pending disbursal and which are ready to withdraw.

Financed invoices: Here you can see historic data about which invoices you’ve had finance against.

Quickly learn how creditworthy new and existing clients are with risk reports

With Satago you can access risk insights, a dashboard of information that tells you how creditworthy your customers are. It also helps reduce bad debt as you can make sure the companies you’re working with aren’t going insolvent.

This data helps you make good decisions about who you work with and how you work with them, so you can plan how to manage their credit control most effectively.

You have access to three screens, showing:

Credit search: On this screen you can view credit information on existing or prospective clients. You can see as many snapshot summaries as you like, and a certain number of complete credit reports each year depending on the plan you’re on (Standard = 3, Plus = 25, Premium = unlimited).

The full credit report includes detailed information on directors and shareholders, financials, mortgages and CCJs.

Analysis: This dashboard shows:
- Aged debtors: How overdue your invoices are in increments of 30 days, with a downloadable CSV or PDF report showing a breakdown of customers and how overdue they are, hyperlinked so you can easily navigate the system and send reminder emails or set yourself a reminder to call or follow up with them at a particular time.
- Risk segments: How many customers fit into which risk band.
- Risk concentration: This combines aged debtors and risk segments, so you could look at how many very high risk customers have invoices 90+ days overdue for example.
- Largest and oldest open invoices.
- Customer credit summary: How many customers fit into each risk band.
- Top industry segment concentrations: This shows which clients are in which sector.
- Highest risk active customers.

Credit limit breaches: Each client has a recommended credit limit based on the data we hold, and you can see here if they’ve gone over their credit limit in overdue invoices.

Simple cash flow management with one easy-to-use tool

While Satago can help you streamline your credit control, it’ll also help you take back control of your cash flow and help your customers pay faster.

When you use Satago, you’ll have no need for multiple tools to manage your business accounts, cash flow and credit control.

Using Satago, you can:

Set up automated invoice reminder emails, customised to your clients in language, schedule and frequency, as well as templating thank you emails and grouping your clients in a way that makes sense.
Easily learn how risky each client is and get free credit reports and insights to help you decide on your credit terms and your approach to credit control.
Use invoice financing for a cash injection if you need it during the month.

Get paid faster with Satago on your team

In this article we’ve covered the different methods of credit control outsourcing, along with the benefits of each. As we’ve seen, each has its advantages and disadvantages, and only you will know whether it’s best for you to opt for an agency, a freelancer or a tool to support your credit control.

If you’re ready to see how Satago’s credit control, invoice financing and risk insights can help you get paid faster, get started today.