Newsletter » How does credit control differ from debt collection?

Credit Control
  • Regarded as a customer relationship tool. Since it focuses its attention on maintaining relationships with the debtor (parent).
  • Schools are in full control of the credit control process, and are first consulted before actions are taken. Schools can stop the process with a months' notice and escalate at anytime.
  • Credit control is the dialogue initiated and utilizes various means of communication.
  • All payments by debtors are made to the schools.
  • Works on a no collection no fee basis.
  • Understands the importance of sustainablity and ensures during the credit control process no debtor is treated unfairly. We abide by our values and clearly set out code of conduct.

Debt Collection
  • Regarded as relationship destruction, since its prime focus deals solely with the payment of the debt, and not relationship building.
  • Schools have limited or no control, debt collection agency has control over the entire collection process.
  • All payments are made to the agency.
  • Fixed montly fee despite no collection being made.
Importance of Credit Control
  • From my extensive research I have discovered leading educational institutions view credit control management as being crucial for the successful operation and sustainablility of their schools. This is a result of insufficient funding by government, schools require payment of school fees to survive.
Good, effective credit control can be time consuming and challenging. Due to the close relationship between schools and parents, many schools are simply not comfortable asking parents to pay their accounts or hesitant on how to approach the subject. As debt gets older it becomes more difficult to recover it. Additionally schools lack time, resources and experience to execute the credit control process. Several schools see credit control as an add on task for the school and tend to outsource the service to overcome these difficulties.