Control Credit Before Late Payment Controls You

EPISODE 12

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You fixed the computer. The invoice is now the thing that refuses to work. It sits there for weeks, receiving less attention than a Windows update nobody asked for. Credit control keeps that delay from becoming your problem to finance. Agree the limit and payment route before the next job starts.

Imagine a regular customer asking you to order six laptops. Lovely sale. Slight complication: they still owe you for the last four. Your inner technician is already comparing processors. Your bank balance would like a word. Check the outstanding balance before ordering, confirm who can approve the purchase, and apply the agreed credit limit. If the customer needs a different arrangement, discuss it now. Finding out afterwards is a very expensive form of customer research.

Make the process work in real life

Set the rules while the relationship is calm. Who gets credit, how much can they owe, when do you chase and when do you pause new work? Follow the same routine each week. Consistency makes the difficult conversation easier because the rule already exists.

A sale is not complete until the money arrives

The survival lesson is blunt: turnover on paper cannot pay a supplier, a wage or a VAT bill.

Do not count promised money as cash. Customers can say “the payment is going through today” with the calm confidence of somebody who has no intention of opening online banking.

Increase deposits where parts are ordered specifically. Collect payment before returning repaired devices. Set credit limits. Pause work for accounts outside terms. A fixed invoice due date is not the opening position in a negotiation.

Build a thirteen week cash forecast with one column per week. Start with the actual bank balance, excluding money reserved for tax and VAT unless professional advice says otherwise.

Actions may include collecting overdue invoices, requesting deposits, reducing non-essential buying, negotiating terms, pausing owner drawings, changing stock plans, selling unused assets or obtaining qualified finance advice. Do not hide the gap with expensive credit before fixing the underlying margin or collection problem.

Use an accountant before trouble, not only after it. Management accounts can show gross profit, overhead, debtor days, stock and service mix. The bank balance cannot tell you which repair category is losing money or how much of the cash belongs to HMRC.

What the real jobs taught me

From the first callout jobs onwards, I learned that being friendly does not mean being vague about payment. Small businesses have bills, wages, tax, suppliers and a future to fund. A clear invoice and a clear due date protect the relationship because both sides know what happens next. Waiting indefinitely is not customer service. It is an interest-free loan nobody agreed to advertise.

Deal with disputes separately

Suppose a client disputes one small item on a larger invoice. Ask them to identify the item and explain why, then agree what happens to the undisputed balance. Do not let a vague complaint freeze the whole account indefinitely. Keep the discussion factual and record any revised payment date. Before accepting another hardware order, check the existing exposure and ask for appropriate payment upfront. Escalation should follow the agreed terms and circumstances, with advice where needed. Nobody wins when frustration turns a recoverable payment problem into a badly handled service dispute.

Keep credit decisions separate from technical enthusiasm

A good customer relationship needs a sensible exposure limit. Before ordering hardware on credit for a client, check what they already owe, who approved the purchase and when you expect payment. A technician can be excited about a new system while the accounts person sees an unpaid balance large enough to require its own postcode. Give someone authority to pause new discretionary work under the agreed terms, and make the escalation route clear. An emergency should trigger a considered decision, not quietly cancel the credit policy.

My recent discussion about professional rates applies here too. The value of the customer's computer does not determine the value of your time or the cost of financing their purchase. A cheap machine can still create hours of diagnosis, travel and administration. Offer an appropriate service at a clear price, or politely decline. Do not extend payment terms simply to avoid explaining the price. Review debts weekly and deal separately with genuinely disputed work, so a complaint receives attention while undisputed invoices do not disappear into it.

Jerry Maguire gave us “Show me the money!” Your invoice needs a due date as well as enthusiasm. Put the payment route and reference where the customer can actually find them.

Fit the approach to your business

Repair shop: A shop should avoid releasing high value equipment or special orders on informal promises unless approved account terms exist.

Callout technician: A callout technician can take payment at the visit for consumers and reserve account terms for checked business customers.

MSP: An MSP should automate recurring invoices, monitor failed payments and link continued service to the written agreement.

Give the next job a better process

·       Create a short credit application and check the legal name, address, contact and payment responsibility.

·       Set a credit limit and payment term based on risk rather than customer confidence.

·       Send accurate invoices immediately with purchase order details where required.

·       Use a chase timetable before and after the due date and keep notes of contact.

·       Pause further non essential work when an account exceeds the agreed limit or terms.

Check before you carry on

How much total credit’s currently exposed?

Which customers exceed agreed terms?

Are invoice errors causing delay?

When will further work be paused?

The next useful move

Your customer did not accidentally become your finance department.

Finish one overdue invoice conversation before starting another unpaid adventure.

About the author

Written by Philip Griffiths of Tech For Techs Group Ltd, drawing on his experience of owning and operating a nationally award winning computer repair business.