A credit control policy is a set of decisions made in advance: your standard terms, how you'll be paid, who follows up, what happens on which day, and when you escalate or write a debt off. Keep it to one page written as dates and actions, and pair it with a system that runs the schedule, because a policy that relies on someone remembering it tends to slip in a busy week.
In this article
The short version
- A credit control policy is a set of decisions made in advance.
- Cover terms, payment method, ownership, the follow-up schedule and escalation.
- Write the schedule as days and actions, on one page.
- Give the policy one named owner.
- Pair it with automatic collection and reminders so it runs in a busy week.
What a credit control policy needs to decide
A policy earns its keep by settling questions before they come up, so nobody has to work out the answer on the day an invoice goes overdue. Five decisions cover most of it:
| Decision | The question it answers | What goes wrong without it |
|---|---|---|
| Terms | What do we offer, and to whom? | Terms get negotiated deal by deal and nobody knows the baseline |
| Payment method | How will the money arrive? | Every invoice becomes a fresh request to pay |
| Ownership | Who follows up? | Everyone assumes someone else is doing it |
| Schedule | What happens on which day? | Chasing depends on someone remembering |
| Escalation | When does this stop being admin? | Escalation happens in frustration, or never |
A quick test for your current policy: could someone on your team tell you what happens on day 8 of an overdue invoice without opening the document? If not, it probably describes intentions, such as "we chase promptly", instead of actions.
A one-page structure
Seven headings, in this order, cover the ordinary case on a single page.
- Standard terms: your default payment period, and who can agree something different. Without agreed terms, a business customer's payment becomes late 30 days after they get your invoice, or after the work is delivered if that's later.
- How you get paid: the methods you accept and the one you prefer. For recurring work, say that a direct debit mandate is set up at onboarding as standard, so it isn't an upgrade someone has to remember to offer later.
- What you need before invoicing: a named contact, the person who approves payment, and any purchase order number or reference their system needs. All three are easy to collect at the start and slow to track down once an invoice is overdue.
- The follow-up schedule: written as days and actions, for example a check three days before the due date, a reminder the day after, a second at day 8, a phone call at day 21 and a formal notice at day 30.
- Interest and compensation: whether and when you'll claim statutory interest and fixed compensation on business debts. The right exists even if your contracts don't mention it, so your policy is deciding whether to use it, and from when.
- Escalation and write-off: who signs off a formal notice, a letter before action, an agency or a court claim, and the point at which a debt gets written off because pursuing it would cost more than it's likely to recover.
- Exceptions: who can vary the policy for a customer, and where that's recorded. A policy with no route for exceptions tends to be ignored instead of varied.
It also helps to say which invoices get which treatment. A £90 monthly invoice and a £9,000 project invoice tend to go wrong in different ways: the small, regular one is best on direct debit, while the large one needs its approval confirmed before the due date. In Adfin's payment data, larger invoices were much less likely to be collected by direct debit than small ones, so they're often the invoices with no collection arrangement behind them at all.
How to make sure it's followed
It helps to give the policy one owner, a named person instead of "the finance team", because follow-up that's shared tends not to happen.
The policy also needs something to run it. Automatic collection and an automated follow-up schedule change what happens each week, where a written intention on its own leaves the week as it was. Adfin turns the schedule in your policy into reminders that go out on the days you've written down, by email, SMS or WhatsApp, and can add statutory interest and compensation to overdue business invoices, with grace periods and waivers for the customers you choose. Its collection agents work within the rules you approve, so your escalation point becomes a setting instead of something someone has to remember.
Consider making the first step a check, a few days before the due date, that the invoice has been approved. That tends to prevent more delay than a reminder sent afterwards, and it's easy to write into the schedule.
Once a year, or after a big change in your customer base, review the policy against your own numbers: how many invoices are paid on time, how many slip past the due date, and your debtor days. If those don't move, the policy needs changing. And check any special terms you agreed with individual customers years ago, which often outlast the reason they were agreed.
The parts that stay with you are the ones your policy already marks as judgement calls: who can vary the terms, when to write a debt off, and what to do about a customer you'd rather keep than press. Naming them in the policy keeps them with the right person, while the rest runs without anyone having to remember it.
Common questions
What should a credit control policy include? Your standard terms, how payment will be collected, who owns follow-up, the day-by-day schedule and the escalation point, plus who can vary it and how a write-off is decided.
How long should a credit control policy be? Short enough to consult in a minute. One page for the ordinary case is usually enough, with the escalation and exception routes named.
Should the policy say we charge late payment interest? Decide it in advance either way. The statutory right applies to business debts even if your contracts don't mention it, so the policy should say whether you'll use it and from what point.
Who should own credit control? One named person. When ownership is shared, follow-up tends to stop happening.
How often should we review the policy? Once a year, against your on-time payment rate, overdue rate and debtor days, and whenever your customer base changes significantly.
Does a written policy change anything on its own? Not much. It changes results when it comes with a mechanism, such as automatic collection and a follow-up schedule that runs without anyone remembering.
Sources
- GOV.UK - Late commercial payments: charging interest and debt recovery (accurate as of October 2026) https://www.gov.uk/late-commercial-payments-interest-debt-recovery
- GOV.UK - Claim debt recovery costs on late payments (accurate as of October 2026) https://www.gov.uk/late-commercial-payments-interest-debt-recovery/claim-debt-recovery-costs
- Adfin - Credit control (accurate as of October 2026) https://www.adfin.com/credit-control
- Adfin - Pricing (accurate as of October 2026) https://www.adfin.com/pricing
