Key point covered in this lesson:
• Making Time or making a change
• Vetting Customers
• Tips that work
• Don’t do this
• Useful resources
The fact is that it takes time to do invoices and debtors follow ups properly. Consider whether you have time to do this. Business wonders often go off in a panic to find more work when cash flow is not what it should be. Very often the problem does not lay with the amount of work at hand, but with the rate at which they are getting paid.
Having a solid system and the capacity to drive it is key to getting all the money you work for. If you know that capacity or efficiency is the problem, it might be time to either acquire more resources, or outsource the function to the professionals who do it every day.
There is nothing wrong with using a debt collection company to assist with running your accounts. This leaves you with time to focus on the work while they take care of making sure the bad payers are kept on their toes.
Credit management companies like Gravity can also assist you with creating terms and conditions that allow them to charge penalties on late payment directly from the customer who defaulted, meaning you get everything you are owed without deductions.
Many business owners might argue that it is not easy to say no to work, but the fact of the matter is you can afford not to do work for customers that can’t or won’t pay you. Technology has made it a lot easier to know who you are dealing with and it is possible to make use of credit reporting services, especially with big contracts and large amounts, to make sure you know who you are dealing with.
You can also check the Companies Offices Registrar to see when the company was first registered and who the owners are. Information on the directors are and what other companies they are involved with. If a company is in administration or in liquidation, or any of its related entities are, it might be a good sign to steer clear of offering credit.
Check online what people are saying on social media and Google reviews. It is quite common for disgruntled people to retaliate with bad reviews, so having a couple is pretty normal. But if 20 people are making the same complaints or allegations, you might want to consider what implication it might have on you. Those bad payers with you are often bad payers with others. To them it makes sense to use your money and not theirs.
At this point, when everything else checks out, you can also take the time to make sure that you have the correct contact details for the customer and that they are reachable on those details.