Many UAE businesses do not have a sales problem. They have a collections problem: strong order books, tight cash. Customers pay in 60 or 90 days, post-dated cheques arrive in bundles, and nobody owns the follow-up. Credit control is the discipline of deciding who gets credit, how much, and what happens when payment is late. It is not about being harsh; it is about being consistent. This guide gives you a practical system.
Step 1: Decide who gets credit and how much
- New customer checks: trade licence copy, tax registration number, authorised signatory, references and, for larger limits, a credit report or bank reference.
- Set a credit limit based on their size, your margin and what you can afford to lose.
- Set standard terms: 7, 30 or 60 days, and any prepayment or deposit for new or risky customers.
- Record all this in the customer master, so the ERP warns or blocks when a new order would exceed the limit or the customer has overdue invoices.
Step 2: Invoice correctly and promptly
Late or wrong invoices create late payment. Issue the tax invoice as soon as delivery or milestone is complete, with correct customer details, purchase order reference and VAT. Send it to the right person in accounts, not only to the buyer. Get the customer's payment process in writing: who approves, which day they run payments, what documents they need. See quotation to cash.
Step 3: Watch the ageing report
| Bucket | What it means | Action |
|---|---|---|
| Not yet due | Within terms | Friendly reminder a few days before the due date |
| 1 to 30 days late | Probably an oversight or process delay | Reminder by email or WhatsApp, and a call for large amounts |
| 31 to 60 days late | A real problem | Call, agree a date in writing, pause new orders if over limit |
| 61 to 90 days late | Risk of loss | Management involvement, formal notice, payment plan |
| Over 90 days late | Serious | Legal advice and a provision in the accounts |
Review it weekly with sales. Salespeople often know why a customer is slow and can unblock payment faster than finance.
Step 4: A reminder rhythm customers get used to
- 3 days before due date: polite reminder with invoice copy.
- On the due date if unpaid: short message asking for the payment date.
- 7 days late: email with statement of account and a call.
- 30 days late: letter from management and a stop on new credit.
Use an ERP that sends these automatically from the invoice record, and logs the replies. For WhatsApp reminders, message only customers who agreed to receive them, using approved templates. See WhatsApp business solutions.
Post-dated cheques: a register, not a drawer
Many UAE customers pay by post-dated cheques. Treat them as a controlled asset:
- Record each cheque on receipt: customer, bank, number, amount, date and the invoices it settles.
- Keep the originals in a locked place with a log of who holds them.
- Show cheques due in the next 30 days on the cash forecast, but do not count them as received money until they clear.
- Deposit on the due date, and mark the result: cleared or returned.
- On a return, notify the customer the same day, reverse the receipt, reinstate the invoice and decide the next step.
The rules on returned cheques have changed over time and carry legal consequences, so ask a lawyer how to proceed in your own case. A well-built ERP keeps the cheque register, links each cheque to invoices and warns you before dates.
Step 5: Handle disputes fast
A large share of late payments are disputes: wrong price, short delivery, missing documents. Log every dispute with an owner and a date, resolve the undisputed part of the invoice immediately, and fix the root cause so it does not repeat.
Step 6: Measure
- Days sales outstanding (DSO): receivables divided by credit sales, times the number of days. Track monthly.
- Overdue percentage: overdue receivables as a share of total.
- Collection effectiveness: how much of what was due this month was collected this month.
- Bad debt write-offs as a share of sales.
Accounting standards require you to estimate expected credit losses on receivables, so keep the ageing and your history ready for your auditor. See the owner dashboard KPIs for where these numbers belong.