--- type: Guide title: The credit control process, step by step description: A step-by-step 2026 guide to the credit control process: setting terms and checking customers, clean invoicing, pre-due reminders, a fixed chasing cadence, escalation, and monthly metrics review. resource: https://accounting.events/resources/credit-control-process/ tags: [credit control process, credit control procedure, accounts receivable process, how to do credit control, credit control steps] timestamp: 2026-10-19 author: Harry P. Smart fact_checked_by: Julie Turnbridge fact_checked: 2026-10-26 --- **The credit control process is the sequence a business runs from setting payment terms to escalating unpaid debt: set terms, invoice, remind, chase, escalate, review.** Summary - Before invoicing: credit-check new customers and put your payment terms in writing. - After invoicing: bill on the day, remind before the due date, chase on a fixed cadence and escalate while recovery is still likely. - Ongoing: review DSO, ADD and CEI every month. Consistency matters most: businesses that follow up on every overdue invoice are 76% more likely to be paid within a week (Chaser 2026 Accounts Receivable Report). Good credit control works before an invoice is ever late. It is a process that runs from the moment you take on a customer to the moment a stubborn debt is escalated, and the businesses with the best cash flow run it consistently. Here is that process, stage by stage, with the data on what actually moves the needle. **Related guides:** [how to chase overdue invoices](https://accounting.events/resources/how-to-chase-overdue-invoices/), [the credit control metrics that matter](https://accounting.events/resources/credit-control-metrics/), [how to reduce DSO](https://accounting.events/resources/how-to-reduce-dso/), [credit control software vs a spreadsheet](https://accounting.events/resources/credit-control-software-vs-spreadsheet/) ## The short answer 1. **Set terms**: Agree terms and check the customer 2. **Invoice**: Bill cleanly on the day 3. **Pre-due**: Remind before it is due 4. **Chase**: A fixed cadence after due 5. **Escalate**: While recovery is still likely 6. **Review**: Track the numbers monthly The whole credit control process on one line. Each stage is covered below. The credit control process has six stages: check new customers and set terms before you invoice; invoice cleanly on the day of delivery; remind before the due date; chase on a fixed cadence once an invoice is late; escalate while the debt is still collectable; and review your numbers every month. The single biggest lever is consistency. Businesses that follow up on 100% of overdue invoices are 76% more likely to be paid within a week, yet about a third leave some invoices unchased every month. 1. Set terms and credit-check before you extend credit. 2. Invoice cleanly, on the day of delivery. 3. Remind before the due date. 4. Chase on a fixed cadence after due. 5. Escalate while recovery is still likely. 6. Review the metrics monthly. ## Set terms and check customers before you invoice Credit control starts before the work does. Run a basic credit check on new B2B customers and set a sensible credit limit, then review it as the relationship grows. Put your payment terms in writing, in the contract and on every invoice. [The UK statutory default](https://www.gov.uk/late-commercial-payments-interest-debt-recovery) is 30 days; you can agree up to 60, and beyond that only by mutual agreement that is not grossly unfair. This is the cheapest stage to get right, because it avoids the bad debt rather than chasing it later. Write those rules down as a [credit control policy](https://accounting.events/resources/credit-control-policy-template/) so every customer is checked and chased the same way. ## Invoice cleanly, on the day Every day between delivering the work and sending the invoice is a day added directly to your DSO, for no reason. Invoice on the day. Make sure each one carries the right purchase-order number, your bank details, a clear due date, the accepted payment methods, and a line stating your right to charge statutory late-payment interest. A clean invoice removes the two most common stalling excuses: it was wrong, and we never got it. ## Remind before the due date Most businesses only start chasing once an invoice is already late. A short, friendly reminder a few days before the due date removes the friction before it builds and tends to bring payment forward. The data backs it up: businesses using AR software, which makes pre-due reminders effortless, are about three times more likely to be paid before the due date than those relying on manual follow-up. ## Chase on a fixed cadence after due - **D** Due date: A same-day, friendly reminder. - **+7** Firm reminder: States the amount and the terms. - **+14** Phone and fee: A call, plus the late fee applied. - **+30** Final notice: Last step before escalation. A fixed chase cadence after the due date, so nothing slips. Once an invoice is late, a predictable sequence beats sporadic chasing every time. A workable cadence: an automated reminder on the due date, a follow-up within a few days, a phone call at about a week for anything above a few hundred pounds, a firmer notice at two weeks that references your right to charge interest, and a formal notice at 30 days. The exact steps matter less than running them on every overdue invoice, every time. ## Escalate while recovery is still likely Likelihood of collecting an overdue invoice by age - 0 to 30 days: ~95% - 30 to 60 days: ~85% - 60 to 90 days: ~70% - 90 to 120 days: ~35% - 120 days +: ~20% A widely cited collections rule of thumb, from commercial collection practitioners (Leib Solutions). Your numbers will vary, but the direction is universal: older debt is harder to recover, so chase early. This is where most businesses leave money on the table by waiting too long. The likelihood of collecting a debt falls steeply with age: strong in the first month or two, but down to roughly a third by the time an invoice is 90 to 120 days overdue. That window, around 90 to 120 days, is the last point at which formal action, a letter before action, a debt-collection agency, or a county court claim, still has good odds. Decide your escalation trigger in advance and apply it, rather than letting old debt drift toward write-off. ## Review the numbers every month What you do not measure, you cannot manage. Once a month, calculate your DSO, look at average days delinquent and your collection effectiveness index, and check which accounts slipped a bucket in your aged-debt report. Segment your debtors so chronic late payers get stricter terms or upfront payment on future orders. The monthly review is what turns credit control from firefighting into a process that quietly improves. ## When software earns its place Every stage above can be run by hand, and for a small, steady ledger that is fine. Software earns its place when the manual version starts to slip: when nobody remembers the pre-due reminder, when the cadence breaks during a busy week, or when statutory interest never quite gets applied. AR tools keep the process running and stop the moment an invoice is paid. Our guide to the [best credit control software UK](https://accounting.events/reviews/best-credit-control-software-uk/) compares the options on chasing, fees and reviews. ## Frequently asked questions ### What are the stages of the credit control process? Six: check new customers and set terms before you invoice; invoice cleanly on the day; remind before the due date; chase on a fixed cadence once late; escalate while the debt is still collectable; and review your metrics monthly. The thread running through all of them is consistency. ### What is the most important part of credit control? Consistency. The data is striking: businesses that follow up on every overdue invoice are 76% more likely to be paid within a week, yet about a third of businesses leave some invoices unchased each month. The gap between average and excellent is mostly about chasing everything. ### When should I escalate an overdue invoice? Earlier than most businesses do. Because the chance of collecting drops to around a third by 90 to 120 days overdue, you should be issuing formal notices by 45 to 60 days and escalating to a debt-collection agency or legal action by about 90 days, while recovery is still likely. ### Do I need software to run a credit control process? No, but it helps once the manual version starts to break down. For a small, predictable ledger, a disciplined person with a calendar can run the whole process. Software earns its place when consistency slips, when volume grows, or when you want statutory interest and fees applied automatically every time. ## The bottom line Credit control is a process. Check customers before you invoice, bill cleanly and on time, remind before and after the due date on a fixed cadence, escalate while the debt is still collectable, and review the numbers monthly. Run it consistently and you will spend far less time chasing, because far less will be late. Figures cited are attributed where they appear. This guide is published by Accounting.Events. ## Sources Sources checked by Julie Turnbridge on October 26, 2026: 1. [The UK statutory default](https://www.gov.uk/late-commercial-payments-interest-debt-recovery) (gov.uk/late-commercial-payments-interest-debt-recovery)