By Julie Lamers
We’re nearing the end of the calendar year, and many of our
business customers may have recently reviewed their debt recovery processes and procedures, to ensure they maintain a healthy cash flow and minimise potential bad debts throughout this year.
When your business is winning new business, it’s great for your P&L but if you don’t follow up your invoices and get paid, it’s not great for your cash flow.
Do you need to review your credit terms or invoice frequency?
You may or may not have standard credit terms that you offer your customers. How promptly do your customers pay against their credit terms and does this payment cycle work for the cash flow of your business?
It may be that you need to think about having shorter credit terms so that you are paid more quickly.
Similarly, you may also wish to look at how frequently you invoice. If you invoice monthly, would it be beneficial to your business to invoice weekly? The sooner you invoice for the goods or services you have provided, the sooner you will get paid.
Follow up your sales invoices
Follow up your customers by calling them to confirm delivery or satisfaction with the goods or services you have provided; if there are any reasons that could give rise to a dispute, find out early and not when payment is overdue. The sooner you resolve any issues, the sooner you will recover the debt.
Stay close to your customers, ensure they are aware of your terms of trade and from the start, ensure they know that you chase up your invoices promptly. Those who shout loudest get paid first!
Do you need to review your terms of trade?
Do you have a clause in your terms & conditions that will allow you to recover your debt recovery costs back from your debtor in the unlikely event that they do not pay?
If you do incur costs, you want peace of mind that you can recover these as well as the debt.
There are many clauses that can assist in the speedy recovery of your debts, they include some of the following:
Kearley Lewis specialises in providing ‘business to business’ debt recovery services directly to Businesses. They have an in-house Law firm, Lewis Holdway Lawyers which provides commercial legal services and experienced Law Clerks undertaking their collection services.