Micro-Learning: Basic Credit Control for Charities
Keeping on top of payments, strengthening your cash flow, and reducing the risk of bad debt.
Good credit control is one of the simplest ways a charity can improve its financial stability, yet it’s often overlooked. Whether you hire out rooms, run events, or provide services that require invoicing, having a clear, consistent system helps you get paid on time and avoid unnecessary stress.
Below is an easy, beginner-friendly guide to basic credit control using a spreadsheet (Excel or similar). No advanced finance knowledge needed – just simple steps to stay organised.
1. Start with a Clear Invoice System
Before you can manage payments, you need invoices that are:
- Easy to create
- Clearly numbered
- Stored somewhere accessible
- Consistent in layout and information
Use a standard template every time. We recommend including your terms and conditions directly on the invoice (A4 landscape version), so the hirer knows exactly what they’re agreeing to and you don’t have to hunt for separate documents.
Top tip: Have hirers sign and return their invoice/contract. This acts as written confirmation of the booking and the terms, protecting both sides.
2. Use a Simple Invoice Numbering System
It doesn’t matter what number you start at, as long as you follow a clear sequence.
MBS recommends:
Year + three digits
Example: 2026001, 2026002, 2026003
This makes it easy to see:
- when the invoice was created
- whether any numbers are missing
- whether any duplicates have been created
If you work with forward bookings, you can still use the current year prefix for clarity.
3. Keep Invoice Records in One Place
For easy credit control, store all invoices in one tab or one spreadsheet. This list should show:
- invoice number
- hirer name
- date issued
- amount due
- amount paid
- balance outstanding
- notes (e.g. “next year booking”, “part-paid”, “overdue”)
Whether you use cloud storage, a paper filing cabinet or shared drive, make sure more than one person has access.
4. Match Payments to Invoices
This is the heart of credit control. When you receive a bank statement or online transaction report:
- Look at each payment received.
- Enter it on your spreadsheet’s Receipts tab.
- Link it to the correct invoice using a simple formula (e.g. =Hirer!H6).
- Your invoice tab will automatically show what’s been paid and what’s outstanding.
This linking method reduces typing errors and gives you a clear, real-time view of income.
Do this at least monthly – weekly is even better if you have frequent bookings.
This prevents debt from quietly building up.
5. Spot Problems Early. Don’t Wait!
As you update your spreadsheet, watch for:
- unpaid invoices
- underpayments
- duplicate payments
- hirers who regularly fall behind
- bookings marked “tbc” that were never confirmed
When you spot an issue, follow up promptly with a friendly email:
“Hi [Name], I’ve noticed invoice [number] is still outstanding. Could you check your records and let me know if payment is on the way?”
Most problems come from simple mistakes – early reminders avoid bigger issues later.
6. Use the Spreadsheet for Quick Analysis
A good booking spreadsheet helps you see patterns over time, such as:
- busiest months
- slow periods
- total income from hirers
- repeat business
- cancellations
- overdue invoices
These insights help trustees and finance committees plan ahead and spot trends affecting cash flow.
7. Make Credit Control Part of Your Monthly Routine
Treat it like housekeeping:
- Update invoices
- Record payments
- Chase overdue items gently
- Archive completed bookings
- Remove “tbc” when confirmed
- Spot cancellations early
- Check the calendar matches your invoice list
By doing this regularly, you protect your charity from bad debt and keep your financial records clean, clear and ready for reporting or independent examination.
Credit Control - Micro Takeaway
Credit control doesn’t need to be complicated.
With a clear invoice system, consistent numbering, and a simple spreadsheet, you can:
- maintain healthy cash flow
- avoid debt building up
- reduce last-minute financial stress
- ensure hirers only get access once payment is confirmed
- provide accurate information for audits and year-end reports
Small steps, applied regularly, make a big difference!
