Benjamin Franklin is reported to have said ‘Remember that credit is money’. And sometimes that credit is money in your debtors ledger when it could be doing you more good in your monthly cash flow plan. These keys might help:
- Trading terms. Let customers know these from the off. Bill promptly after product delivery or job completion.
- Credit. Run credit checks before you offer credit. Ask customers to complete a credit control application.
- Debtors ledger. Review this regularly. Act on overdue payments.
- KPIs. How much money is tied up in payments pending? On average, how long does it take to collect? Let your team know the goal is to continuously reduce these numbers.
- Systems. It’s not best use of your time to chase debts. Delegate it and give your debt manager tools to make it work, scripts for follow up calls, templates for emails and letters. Train your delegate to be systematic with a ‘dripping tap’ approach. Go over the scripts and prep your debt manager with all the payment options your business offers.
- Customers. They’re your favourite people. You want them to feel great about your business. Make it as easy as possible for them to pay you and continue to enjoy your awesome products and services. Offer payment plans. Set them up with payment solutions such as smartAR.
- Plan B. Set a time limit for turning debts over to a collection agency. Know when to write off a bad debt and keep records for year-end.
If you would like more help with strategies for managing your debtors, and unlocking your cashflow, get in touch with us today.
Contact us today for a no-obligation consultation.
