Financial management is indispensable to avoid disruption in cash flow, whether running a business or attempting to lead a stable life. Unfortunately, many think that when we talk about money management, it means tracking every single minute expense. However, that is not the case; it is more of a systematic approach that has to be followed with discipline.
Maintaining a healthy credit score can be challenging as you have to tackle problems like bad debts, partial payments from customers, etc. Hence we have shared tips to overcome such financial challenges.
How to Pull Off Effective Credit Control While Running a Business
Credit control is essential to business operations as it helps ensure an even cash flow. It is a collection of managerial practices to supervise a company’s accounts receivable.
Effective credit control ensures that the company can bear its overhead expenses on time and reinvest capital to expand its ventures further. Here you can find some of the widely followed strategies to improve credit control over a long period of time.
- Map Your Client’s Credit Management
You can mitigate risks in a particular deal by researching a customer’s paying tendency. Based on such credit management tactics, your enterprise can significantly reduce instances of bad debts.
Businesses often skip this procedure as producing regular credit reports demands a dedicated budget and time. However, it would be wise to incorporate this process as it helps you evaluate which clientele is trustworthy of credit facilities.
- Build a Positive Business Relationship
Many companies make the mistake of behaving rudely with their customers while communicating payment due dates. It increases the chances of losing a potential client. Also, it puts the company’s goodwill at stake as the same customer may post reviews online regarding their negative experience.
Thus, the best approach will be to make courtesy calls politely asking the people to clear off their outstanding sum. Moreover, the company agents should pay attention to hearing the problems faced by their clientele regarding necessary paperwork and financing options. It will speak about the professionalism and customer friendliness of the brand.
- Encourage Timely Payments
Keeping discounted rates for the full settlement of invoices online at the time of purchase can be a great strategy towards ensuring timely payments. Therefore, consider keeping a scanner or displaying necessary banking details encouraging customers to pay off the bill right at the beginning, even if they are short of cash.
As a business owner, this sounds discouraging as the market conditions may not always permit you to give offers. Instead, you can restructure the pricing variants to ensure there is no need to compromise on profits.
- Produce Bills Promptly
Invoicing precisely and right when executing an order is the best way to contribute towards credit control. However, the billing authority has to be confident regarding the particulars and ensure the client receives no misinformation due to haste.
Sending bills via email or SMS is an excellent idea as it updates the purchase status and creates a channel for future deals. In addition, staying in touch with the customers has been proven to eliminate problems arising from credit facilities.
What are Some Personal Finance Management Tips?
As an individual, money management can be tricky, considering the day to day expenses. Unfortunately, most people commit the mistake of taking hefty loans without proper financial analysis, which leads to a debt-laden life and even worsens your creditworthiness.
Thus to help you avoid such issues, we have arranged a few tips which will allow you not to rely on unnecessary loans and maintain a healthy credit score:
- Track All Expenses: Maintaining this habit will eradicate potential overspending in certain areas by figuring out everyday spending habits. Using accounting software for this purpose will be the most convenient.
- Avail Credit Facilities: A financial institution offers discounts if you use their services to pay utility bills and buy expensive items. Also, credited money helps you to meet emergency requirements at times when you lack money at hand.
- Stick to a Budget: Efficient management of personal finances is impossible without budgeting. Drawing a budget in advance and making necessary adjustments will help you better estimate monthly savings.
How to Improve CIBIL Score
Here are a few tips that you should follow on how to improve CIBIL score immediately:
- Try not to utilise more than 30% of your credit limit
- Shy away from applying for credit cards from several lenders
- Increase the credit limit and maintain a low credit utilisation ratio to be marked as a low-risk borrower
- Never miss any EMI or make partial payments, as credit card companies consider such activities as hints of risk
- Settle credit card bills on time
Ensuring a healthy credit score of above 750 is one of the crucial must-dos for those attempting to achieve a sound personal financial condition. Besides the above, credit control measures striving for higher income in the future are essential to meet a company’s financial objectives quickly, thereby ensuring rapid growth.
