Credit control is a vital aspect of block management, ensuring financial stability and a smooth cash flow. It involves managing tenant payments to maintain profitability and operational efficiency. In this blog post, we'll explore why good credit control is so important in the block management industry and the benefits it brings.
Financial Stability
When credit control is well managed it helps to maintain financial stability of the business. Block management companies will pay large expenses to contractors to maintain the properties that they manage. Making sure that debtors pay on time enables property owners and managers to manage cash flow effectively. Covering costs, managing the upkeep properties, and hopefully generating profits.
Minimising Arrears and Bad Debt
Having good credit control processes minimises arrears and bad debt by helping you identify large and growing arrears quickly. Regular payment reminders, proactive debt recovery procedures, and tenant screenings help reduce the accumulation of arrears and mitigate the risk of bad debt.
Building Confidence
Good credit control improves the relationships between the block manager and the block owner. By demonstrating sound financial management and providing accurate reports, block management companies strengthen trust with their existing customers and improve their chances of winning more blocks.
Legal and Compliance Compliance
Credit control ensures compliance with legal and regulatory requirements. By adhering to lease agreements, rent increase regulations, and tenant rights, block management companies mitigate legal risks and avoid disputes which can become both lengthy and costly.
Operational Efficiency
Efficient credit control streamlines administrative tasks and improves operational efficiency. Automation can be employed to generate invoices, send payment reminders, and track payments. This frees up time for property managers to focus on tenant satisfaction, property maintenance, and business growth.
Conclusion
Credit control plays a vital role in block management, ensuring financial stability, mitigating legal risks and improving operational efficiency. Good credit control is a key component to the success and growth of block management businesses. Automating your credit control process can save time, costs, improve outcomes and allow your business to scale more easily.
If you want to know more about how we automate credit control for block managers, get in touch.