Working down the aged debt report
At the start of each month, the credit controller prints the aged debt report. It runs to many pages. They start at the top, ring the biggest balances, send statements and reminder letters by hand, note promises on the printout, and try to remember who said the cheque was in the post. Disputes are passed to branches by email, and some come back.
By the middle of the month the report is out of date, a customer with a long overdue balance has been buying all month because nobody put the account on stop, and a reliable customer with a single query has been chased three times.
Why chasing never catches up
Trade credit at a builders merchant has its own difficulties. Customers are small contractors with irregular cash flow, larger contractors with rigid payment runs, and everything in between.
- The aged debt report shows balances, not risk: it doesn't know that one account always pays late but pays, and another has suddenly stopped buying.
- Promises to pay live on paper or in a spreadsheet, so a broken promise isn't noticed.
- Disputes block payment but are resolved by branches with no deadline.
- Reminders are sent in batches when there is time, not on a steady schedule.
- Branch managers have no view of their own customers' overdue position.
What slow chasing costs
Cash tied up in trade debt that could be paying suppliers. Bad debts that grew because an account kept trading while overdue. Credit controller time on the wrong accounts. And friction with good customers who get chased for disputed invoices while the dispute sits unanswered at a branch.
A credit control routine we build
- The sales ledger is read from your merchant system daily, with balances by age, payment history and recent trading.
- Accounts are ranked by rules you set, such as overdue value, days beyond terms, broken promises and a sudden fall in buying, so the day's calls start with the riskiest.
- Statements and reminders go by email on your schedule, with copy invoices and proof of delivery links attached, and bounced emails are flagged.
- Promises to pay are recorded with a date and amount, and a broken promise goes back to the top of the list.
- Disputes are logged against the invoice, routed to the branch with a response date, and escalated if missed.
- Branch managers see their customers' position and disputes waiting on them, and accounts meeting your stop criteria are flagged for a decision.
| Signal | What the routine does |
|---|---|
| Promise broken | Account back to the top of the call list |
| Dispute waiting on branch | Reminder to branch, then escalation |
| Buying stopped suddenly | Flagged for a call |
| Beyond stop criteria | Flagged for a stop decision |
| Email bounced | Contact details to update |
Whether to stop an account, take a payment plan or pursue a debt formally is your decision and, where needed, your adviser's. The routine makes sure the facts are ready when you decide.
What the credit controller's week becomes
Each day starts with a short, ranked list rather than a long report. Reminders go out on time without a mail merge. Promises and disputes are visible to anyone who needs them. Branches deal with disputes because they can see them, and the ones that don't are visible too.
Does this sound familiar?
- Chasing works from a printed aged debt report.
- Promises to pay are noted on paper.
- Disputes sit at branches with no deadline.
- Customers keep trading well past your terms before anyone notices.
- Branch managers don't know which of their customers are overdue.