Debt collection is an important subject for businesses especially when they are small businesses. You can stabilise your cash flow when you are able to recover debt successfully. There are several methods of collecting a debt.
It is important to have a debt collection strategy from the start so that you have an idea of how to cover your expenses. There is commercial debt collecting Brisbane agencies that you can turn to but you should try a few other methods before you get to this solution. Wait for 90 days before you exhaust your other avenues of collecting debt. If the customer is not responding to your efforts or is not willing to pay, this can be the method you can consider. But when you have a good collection strategy, it can make for a better relationship with your customers. When there is a delay in payment, you first need to check if everything is correct on your end. This means reviewing your invoices to see if you have specified when the payment is due. You need to make sure that your invoicing policy is solid so that it doesn’t allow for any loopholes. There is specific information you should include in an invoice such as the date, contact details of debtor and creditor, payment terms, different payment methods available, deadlines, an itemised list specifying the number of items and total price along with a clear total invoice value.
The technology you use for invoicing should be considered. Many companies use Excel or Word for this but this will require a lot of manual data entering. There is invoicing technology you can look into where there is software that is used to track client interactions, provide automated follow-ups etc. These will make your invoicing process a lot more productive. You can look into different invoicing applications to see which features suit your business the most. Sometimes you may notice that your cash flow is slowing down when you are billing your clients monthly. In this situation, you can select bi-monthly invoicing. Make sure that invoices are sent on the first day of the month so that clients also have money at hand and they are less liable to miss the invoices.
Think about how your invoices are delivered to the clients. This also has an impact on the speed of receiving payment. Most of the time this is done through email or certain applications. But you need to understand that email is not the solution when it comes to pressing debts. So you need to update your internal policy to contact the customer through phone calls after two weeks of delayed payment. Phone calls are harder to ignore compared to emails and it will not be possible for the client to claim they haven’t seen the email or are not aware of the delay. You have to make payments easy by enabling the use of certain paying portals that many customers are familiar with. And when all else fails, you can turn to a debt collection agency. This can come at a cost but it will ensure that you get paid.