The start of a new financial year is often driven by growth.

Businesses set ambitious revenue targets, sales pipelines are prioritised and teams focus on winning new work.

Yet the one area which is most critical is overlooked – effective credit control habits.

Without strong foundations in place aged debts can begin to build quietly in the first two quarters.

What may seem like minor delays or small process gaps can quickly compound, creating pressure on cash flow, increasing operational workload and introducing unnecessary financial risk.

This is where effective credit control habits make a measurable difference.

Rather than treating credit control as a reactive function and only chasing payments once they become overdue, finance leaders benefit from embedding this as a daily discipline.

Early action, consistent processes and clear expectations prevent issues before they escalate.

Implementing effective credit control habits is essential for maintaining healthy cash flow.

Starting the year with a structured approach to credit control not only protects working capital but also supports stronger forecasting. better customer relationships and long-term financial stability.

Habit One : Tighten Payment Terms

Clear and consistent payment terms are the foundation of effective credit cotrol habits.

When terms are unclear, inconsistent or too flexible, they create confusion and increase the liklihood or delayed payments or disputes. Customers are far more likely to pay on time when expectations are clearly defined from the outset.

At the beginning of the financial year, businesses should take time to review and strengthen their payment terms.

This includes ensuring that:

• Terms are standardised across the organisation
• Payment expectations are clearly stated in contracts and on invoices
• Internal teams are aligned and apply terms consistently

Starting the year with a structured approach to credit control not only protects working capital but also supports stronger forecasting, better customer relationships and long-term financial stablity.

Habit Two: Refresh Credit Checks

Financial positions can change quickly, particularly in uncertain economic conditions.

Refreshing credit control is one of the most practical and effective credit control habits for protecting your business at the start of the year.

Many organisations rely on outdated credit assessments, which can leave them exposed to unnecessary riak.

A proactive review allows finance teams to identofy potential issues early and adjust their approach accordingly.

Key actions include:

• Reviewing existing customer credit profiles
• Updating credit limits where appropriate
• Identofying warning signs such as slower payment patterns or increased credit usage

Early identification of risk is cricuial as it allows businesses to make informed decisions, whether that means tightening terms, requesting upfront payments or increasing monitoring on certain accounts.Prevention is always more cost-effective than recovery, as by refreshing redit checks regularly, businesses reduce the likelihood of late payments developing into larger financial issues.

Habit Three: Review High-Risk Account

Not all customers present the same level of risk.

Some accounts require closer attention due to their payment history, outstandig balances or overall exposure.

Reviewing high risk accounts early in the financial year is a key part of maintaining effective credit control habits.

This process helps finace teamd prioritise their efforts and focus on areas where the potential impact is greatest.

Things to consider may be:

• Customers with a history of late or inconsistent payments
• Accounts with a large or growing outstanding balances
• Clients howing changes in payment behaviour

By identodying these accounts early, businesses can take proactive steps to manage risk.

This might inlude more frequent communication, adjusted payment terms or tighter credit limits.

Left umonitored, high-risk accounts can quickly contribute to aged debt and cash flow pressure. Early enagagement helps prevent issues from escalating and supports more predictable financial performance.

Habit Four: Set Structured Follow-Up Cadences

One of the e most common weaknesses in credit control is inconsistent follow-up.

When reminders are sent too late or not at all, overdue invoices become harder to recover.

What could have been resolved with a simple prompt can turn into a prolonged delay or dispute.

Setting structured follow-up processes is one of the most impactful effective credit control habits businesses can embed.

This incliudes:

• Scheudling reminders before invoices become due
• Folowing up promptly once payments are overdue
• Establishinh clear escalation steps for unresolved balances

Consistenct is key as a structured approach ensures that no invoices are overlooked and that customers recieve regular, professional communication.

Importantly effective follow-up is not about aggressive chasing.

It is about maintaining clear, respectful communication that reinforces expectations and encourages timely payment.

When done effectively, it strengthens relationships while improving collection outcomes.

Habit Five: Train Teams on Early Enagegment

Credit control does not sit solely within the financial function as it requires collaboration across the businesses, particularly within sales and customer facing teams.

Training teamsto engage is a crictial part of building effective credit control habits.

Training teams to engage early is a crucial part of building effective credit control habits.

Often payment issues can be prevented through simple, proactive conversations. Whe n expectations are reinforced early and consistently, customers are less likely to delay or dispute payments.

Training should focus on:

• Communicating payment terms clearly from the outset
• Encouraging early discussions if delays are expected
• Maintaining professional and consistent messaging

Aligning teams ensures that credt control is supported at every stage of the consumer journey, not just after an invoice becomes overdue.

This collaboartive approach strengthens relationships while reducing the risk of late payments developing in the first place.

Strengthen Your Credit Control with Darcey Quigley & Co

Strong credit control habits at the start of the financial year help protect cash flow and support sustainable growth.

Aged debt builds gradually through process gaps, inconsistent communication, and delayed action—putting pressure on finance teams and reducing visibility.

Clear payment terms, updated credit checks, and consistent follow-ups prevent issues early. Prevention is always more effective and cost-efficient than recovery.

Credit control is a key part of financial governance. Businesses with structured processes experience fewer disputes, lower write-offs, and more reliable cash flow.

Darcey Quigley & Co supports finance leaders through audits, reviews, and expert guidance—helping reduce risk and build financial resilience.

Visit our website or contact us today to speak with one of our specialists and find out how we can support your cash flow strategy throughout 2026 and beyond