Collecting your Debtors 

Cashflow management is one of the biggest challenges faced by a small business. Collecting money outstanding from debtors is imperative to the smooth running of your own business.

At some point every business will encounter late paying customers and a system for proper management of your debtors will maintain a healthy balance between getting paid on time and avoiding bad debts.

Here are a few examples of simple tips to ensure a smooth debt collection process while also maintaining customer relationships.

Invoices issued to your customers should clearly and specifically outline your payment terms. Giving the customer a clear message about how and when you expect to be paid for your products or services will help you maintain good cash flow and customer relationships.

Remember by law, and common courtesy, there are things you can and cannot do or say to encourage debtor payments. You can contact debtors to request payment of an outstanding account by letter, phone or in person. You must do this in normal business hours and not threaten, harass, or physically intimidate. We suggest being consistent with your collections and to start contact at 7 days overdue.

Phone calls are an important debtor collection tool. Sending reminder invoices or debtor statements can easily be missed or ignored whilst a phone call is harder to ignore. Most times it is an honest mistake, and they will pay after the first reminder. If not, a phone call is a quick and efficient way to make it known to them that you have provided a service or product and expect a prompt payment.

If you feel like you need help with collection of debtors or have any questions about the best way to contact your clients and customers make an appointment to see one of our accountants today so we can point you in the right direction.


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