Have you ever seriously considered how long you’re waiting to chase up on your overdue debtors? The longer you wait to follow up on an overdue account, the more difficult it is to get the customer to pay.
Talk to any credit control expert and they’ll tell you the sooner you follow up an overdue invoice the better. You’ll not only get paid sooner, but you’ll also send a clear signal to your customer that you take your payment terms seriously.
So why do many of us wait so long to enforce our payment terms? Exposing our businesses to unnecessary risk. And remember all if your customer is paying you late in the first place, isn’t that a sign of more trouble to come? Or perhaps you need to revisit your payment terms – maybe they’re just not working for your customers?
Think about a common scenario that plays out in many businesses today:
Day 0 – Raise & send invoice with 14 day payment terms
Day 14 – Invoice is due
Day 21 – Send a reminder
Day 28 – Send another reminder
Day 35 – Make a phone call
Day 42 – Make another phone call
… you get the idea.
The point is that a lot of businesses are waiting an extraordinary amount time to get paid and somehow it’s become “normal” or “acceptable”. Or maybe we’re all just too busy to stay on top of it?
It doesn’t have to be this way.
Why not (starting today) put a process in place to ensure your overdue invoice reminders are sent out the day after an invoice due date is missed – reducing your risk and increasing your working capital.
What would need to happen in your business to make this a reality?
- Reconcile your bank account daily
- Someone in your office to send the reminders*
Winning in small business is about systematizing and automating good behaviors. Following up debtors rapidly is good behavior. Being too scared (or busy) to have that awkward conversation with your customers is not good behavior. But thanks to tools like Debtor Daddy you can at least have someone/something else have that conversation for you – automatically.
So what’s stopping you?