Credit Control and Debt Chasing Services for Irish SMEs: Get Paid on Time, Every Time

Late payments are the slow puncture of Irish SMEs. The sale closed, the invoice went out, you delivered the work, and now the cash is sitting in someone else's bank account paying for someone else's payroll. You chase, they promise, you chase again, and you start to feel like a debt collector instead of a business owner.

Credit control is not just sending reminders. It is a system that protects your cash flow, margin and time. Done properly, it reduces debtor days and lowers your exposure to bad debts. We work with small businesses across Ireland, from Dublin city service firms to regional contractors, and the pattern is consistent: the numbers say the business is profitable, the bank account says otherwise.

Why is credit control the key to steady cash flow for Irish businesses?

Cash flow is the oxygen of a small business. Profit on paper does not pay your VAT bill, your payroll or your rent. Cash in the bank does. When customers pay late, the timing mismatch between money out and money in becomes the single biggest cause of avoidable stress for owners.

Debtor days, sometimes called days sales outstanding, is the average number of days from date of invoice to payment: trade debtors divided by annual credit sales, multiplied by 365. If your terms are 30 days and your debtor days are sitting at 65, you are financing your customers for an extra month. Real money tied up in someone else's working capital, and time-consuming to recover.

Late payment legislation gives B2B suppliers a statutory right to interest and compensation on overdue commercial invoices, set out in the European Communities (Late Payment in Commercial Transactions) Regulations 2012. The supporting policy sits with the Department of Enterprise, Trade and Employment. Most owners never use these rights, but knowing they exist changes the conversation.

What is credit control and what does it include day to day?

Credit control is the end to end process of deciding who you sell to on credit, on what terms, and how you ensure customers pay on time. It covers the moment a new client lands in your inbox through to the day the money clears. The job is to protect cash flow and manage credit risk without choking off sales.

In practice, a good credit control function covers:

• Onboarding and credit checks. Before you extend credit, you assess the risk: a basic credit check, a directors' search on the CRO, and where relevant a check against the Central Bank of Ireland's Central Credit Register, which holds credit data on borrowers and lenders in Ireland.
• Credit limits and credit terms. Each customer gets a documented credit limit and clear payment terms (for example, 14 or 30 days from date of invoice).
• Invoicing accuracy and timing. Invoices go out same day with the correct PO, contact, VAT and remittance details so there is no excuse to delay timely payments.
• Reminders and follow up. A defined schedule of pre-due nudges, due date notices, and overdue chases, escalating in tone as the invoice ages.
• Dispute management. A documented process for capturing and resolving disputes so they do not become permanent excuses not to pay.
• Escalation. Clear rules on when to phone, when to put accounts on stop, when to issue a final notice, and when to involve a collection agency.
• Reporting. Weekly visibility on aged debt, debtor days, promises to pay, and high-risk accounts.

Some firms call this credit management, others credit control. The terms are used interchangeably in Ireland. If there is a useful distinction, credit management is the broader policy layer and credit control is the day to day operational layer. Clean ledgers feed both, which is why this work depends on solid bookkeeping services underneath. Without good credit management feeding accurate financial health data, every decision becomes guesswork.

What are the most effective steps to get paid faster before chasing even starts?

Most late payment problems are designed in, not chased away. The cheapest collection is the one you never have to do. If your invoicing is unclear at the front end, no amount of polite reminders at the back end will fix it.

A few practical moves consistently shave days off debtor days for small businesses:

• Set expectations up front. Quote and contract documents should state credit terms, accepted payment methods, due date convention, and late payment consequences.
• Invoice immediately. The clock only starts when the invoice arrives. Repeating invoices in Xero handle this automatically for monthly retainers.
• Get the invoice right. Wrong PO, wrong contact, missing VAT number, unclear narrative: each one is a free reason to delay.
• Make it as easy as possible to pay. Bank details on the invoice, payment links where appropriate. A small prompt discount for early settlement can help, although it eats into margin.
• Confirm receipt of the invoice. A quick automated email catches the "we never got it" excuse before it grows into a 60 day overdue.
• Take deposits or stage payments on bigger jobs. A 30 percent deposit on a five-figure project changes your exposure to bad debts overnight.

What should a good credit control timeline look like (7, 14, 30 day example)?

A structured reminder schedule keeps the process consistent. Here is a cadence that works for most Irish SMEs on 30 day terms.

Stage	When	Channel	What you do
Invoice issue	Day 0	Email	Send invoice with clear due date and remittance details.
Confirmation	Day 2 to 3	Email	Confirm receipt. Resolve "didn't get it" issues now.
Pre-due reminder	Day 23	Email	Friendly nudge to confirm payment is scheduled.
Due date notice	Day 30	Email	Polite confirmation the invoice is now due.
First overdue reminder	Day 33 to 35	Email	Firmer tone. Ask for a specific date it will be paid.
Phone call	Day 40	Telephone	Speak to the accounts contact directly. Get a promise to pay with a date.
Final notice	Day 50 to 55	Email + recorded post	Formal final notice referencing statutory interest entitlement.
Escalation	Day 60+	Solicitor / collection agency / Small Claims	Pass to a third party or initiate legal action.

The point of the timeline is not the dates themselves. It is consistency. Every customer treated the same, no awkward "have I chased too soon" calculation.

What should your credit control policy include for Irish customers and clients?

A written credit policy is one of the highest-leverage documents a small business can produce. It does not need to be long; it needs to be clear, applied consistently, and visible to the team. Without one, every decision becomes a one-off judgement call, which is where bad debts creep in.

At minimum, the policy should cover:

• Payment terms by customer type (e.g. 7 days for new clients, 30 days for established clients).
• Credit limits and how they are reviewed.
• Deposit and stage payment rules for project work above a threshold.
• Required information before credit is granted (company number, VAT number, directors, trade references).
• The reminder and escalation schedule.
• The dispute process: how a dispute is logged, who owns it, the resolution timeline.
• Late payment handling, including the right to charge interest under the 2012 Regulations.
• Stop-supply rules: when an account is placed on hold, and who can release it.

The policy should be referenced in your terms and conditions and shared at onboarding. It stops the conversation later being about whether the rules are fair.

When does debt chasing become necessary, and how do you do it professionally?

There is a point in every overdue invoice where polite turns into firm. Knowing where that line sits, and crossing it without burning the relationship, is the craft of credit control. Most owners either cross too soon and damage repeat business, or never cross at all and write off cash they should have collected.

Signs it is time to chase actively, not just remind:

• Promises to pay have been made and broken more than once.
• Reminders are being ignored or bouncing into an unattended inbox.
• The customer has gone quiet after a previously friendly response.
• You see warning signs elsewhere (court judgments, supplier complaints, staff turnover).
• The debt is approaching 60 or 90 days past due.

When you do chase, the goal is resolution, not retribution. Pick up the phone, listen first. There is usually one of three things going on: a cash flow problem on their side, an unresolved dispute they have not flagged, or pure avoidance. For a cash flow problem, a structured payment plan often beats threats; three monthly instalments paid on time beats a lump sum that never lands. Confirm in writing. For a dispute, isolate the disputed portion, request specifics, set a resolution deadline. For avoidance, escalate quickly.

What information do you need before you start chasing a debt?

Walking into a collection call without your file in order is how you lose the argument. Before you pick up the phone, make sure you have:

• The original invoice, PO, signed quote or contract.
• Proof of delivery or completion.
• The full email and phone trail with the customer.
• An up to date statement and an aged debt report.
• The accounts payable contact name and direct number.
• Notes from previous calls, including promises to pay and dates given.

If a dispute is finally upheld, you may be able to issue a credit note and claim VAT bad debt relief on the unpaid portion through your VAT return. Conditions are specific; rules are set by Revenue. Get advice before writing anything off.

What does a fully managed credit control service do differently?

A managed credit control service does the work for you, using a defined process, in a tone that protects customer relationships. It is not a collection agency knocking on doors. It is a finance function that sits between you and your debtors, runs the cadence, handles the disputes, and reports back weekly.

The work breaks down into four phases. Setup and ledger clean-up first: which invoices are real, which disputed, which customers should never have been given credit. Old aged debt is segmented into "likely to collect", "needs negotiation", and "write-off", with a plan for each bucket. Second, reminder cadence and calling strategy: a consistent schedule with templated emails and a calling rota, calibrated by customer type. Third, dispute triage with ownership assigned and deadlines tracked. Fourth, weekly reporting: aged debt, debtor days trend, collection rate, top debtors, promises kept and broken. This feeds directly into the owner's wider KPI dashboards.

In-house versus outsourced: how do you choose the right approach in Ireland?

There is no universal right answer. The choice depends on size, sector, team, and how much owner time the current process is consuming.

Approach	Best for	Strengths	Watch-outs
In-house	Larger SMEs with a dedicated finance hire	Direct customer knowledge, full control of tone	Cost, holiday cover, awkwardness when the chaser also sells
Owner-led	Very small businesses with low volume	Cheap, simple, owner has full context	Inconsistent, often dropped when the owner is busy
Fully outsourced	SMEs from approximately one to ten million in revenue	Process discipline, professional tone, weekly reporting	Provider needs deep understanding of your customer base
Hybrid	Businesses with internal invoicing but no chasing capacity	Internal team owns sales; outsourced partner owns chasing and reporting	Clear handoffs needed so customers don't get duplicate messages

When assessing a provider, look for a clear written process, transparent reporting, a tone that protects rather than antagonises customer relationships, and explicit boundaries on escalation. Ask for a sample weekly report and what happens at day 60 and day 90.

What should you track to know if your credit control is working?

Credit control without reporting is just hope. You need numbers, and you need them weekly.

• Debtor days (DSO). The headline number. A figure falling from 65 to 45 over a quarter is healthier than a flat 35.
• Aged debt buckets. Current, 1 to 30 days, 31 to 60, 61 to 90, 90+. The shape of the curve tells you whether you have a recent problem or an inherited mess.
• Collection rate. Cash collected as a percentage of total invoiced.
• Dispute rate and resolution time. How many invoices get disputed, and how long disputes take to close.
• Promises to pay kept versus broken. A customer who breaks two promises in a row is your next bad debt.
• Concentration risk. Top five debtors as a percentage of total receivables.

This data lives in your accounting system. Pulling it into the wider weekly picture is the job of your management accounts pack, alongside profit and loss, cash and runway. Linked to a forward-looking forecast (see our piece on 13-week cash flow forecasting and the cash flow statement), credit control numbers stop being a backward-looking scoreboard and start informing decisions. For owners running a strategic finance function, this rolls up into CFO advisory conversations: pricing, margin, working capital, and where credit risk really sits.

Where do the Irish legal supports fit in if a debt becomes unrecoverable?

Most disputes settle long before any of this is needed, but knowing the landscape changes the tone of your final notice. You have several formal options when a B2B debt remains unpaid.

• Statutory interest and compensation. Under the late payment regulations, you can charge interest at the ECB main refinancing rate plus eight percentage points, plus fixed compensation. The supporting policy and EU Directive 2011/7/EU sit with the Department of Enterprise, Trade and Employment.
• Small Claims and court action. For lower-value B2B disputes the Small Claims Procedure offers a low-cost route; for larger debts a solicitor's letter and Circuit or High Court proceedings follow. Guidance at courts.ie.
• B2C consumer disputes. Where the customer is a consumer rather than a business, the Competition and Consumer Protection Commission sets out the consumer rights framework.
• Local supports. Your Local Enterprise Office runs training on financial management for small businesses, including credit control.

Frequently asked questions about credit control in Ireland

What is the difference between credit control and debt collection?

Credit control is the full process of managing credit risk and getting paid on time. It starts before the sale and ends with money in the bank. Debt collection is one component within credit control, focused on chasing invoices that are already overdue. A good credit control system means you do less debt collection because fewer invoices get to that stage.

How quickly should I follow up on an unpaid invoice?

Send a polite pre-due reminder around 7 days before the due date, a due date notice on the day, and a firmer overdue reminder within 3 to 5 working days after. Pick up the phone at around day 10 past due. Consistency matters more than speed.

Can I charge interest on late B2B invoices in Ireland?

Yes. The European Communities (Late Payment in Commercial Transactions) Regulations 2012 give B2B suppliers a statutory right to interest and fixed compensation on commercial debts paid late. The rate is linked to the ECB main refinancing rate plus eight percentage points.

Should I offer a payment plan if a customer cannot pay right now?

Often yes, but on your terms. A structured plan with specific dates, amounts and a stated consequence of a missed instalment is usually better than writing off the debt. Confirm the plan in writing. Put the customer's account on stop until the plan is complete.

How can I reduce late payments without damaging client relationships?

Treat credit control as a system, not a series of individual confrontations. Set expectations up front, invoice cleanly, follow up on a published schedule, and keep the tone consistent. Customers who value the relationship will respect a firm and predictable process.

Ready to reduce late payments and improve cash flow?

Late payments are draining, distracting, and entirely fixable. If you are spending more time chasing money than running the business, the system around your invoices is the problem, not the customers.

We run fully managed credit control and debt chasing for Irish SMEs. Supportive in tone, firm where it needs to be, systemised, and reported on weekly. Book a consultation and we will review your debtor position, agree a plan, and start collections. Get in touch today; the cash sitting in someone else's bank account belongs in yours.

Disclaimer: This guide is for general information purposes only and does not constitute tax advice. Tax rules and thresholds can change. Always consult a qualified accountant or tax adviser for advice specific to your circumstances.