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How to effectively manage your debtors with some simple, time-saving tasks?

By Andrew Kingstone - Updated on February 14, 2022

It is widely known it can only take a few minutes to make a significant difference. The next time you are looking for some immediate results for managing your debtors, here are some productive credit control tasks that you can complete within minutes.

The secret is, there is no secret: credit control is a difficult job that needs discipline, expertise, devotion, and purpose.

Credit control can be time-consuming, which is why businesses either out-source or have sizable teams. Many smaller companies don’t have that level of commitment, while those that do are often looking for faster and more effective ways to improve their credit control strategy.

A. Scrutinize your Debtors ledger

This may sound daunting, particularly for businesses with hundreds of customers, but a quick check of your debtors’ ledger each morning can be a great way to highlight which of your customers are approaching or have missed payment deadlines, especially once the cash allocation is made. This information can then be used to target where you spend more of your credit control time to get the best results and before some of your debtors become issues.

B. Rank your aged debts

Businesses often have multiple aged debts that consume a lot of your credit control time. It is helpful to take a few minutes to rank the high-value invoices. Focusing on the higher value unpaid invoices can be a simple step to enhance your cash flow while you wait for payment from your other customers.

C. Make a welfare call

We cannot stress that it’s really important to keep in touch with your customers throughout the credit period to keep your invoice in front of their minds. A quick reminder call to a customer can remind them of any looming payment deadlines that increases your chances of getting paid on time and fosters your relationship with the customer.

D. Review your invoice templated terms

Check your basic invoice template. Are the credit terms and expected payment dates clearly stated? Is it too cluttered and confusing? Many businesses tend to underestimate how much their invoice template can affect payment times – what it should say and often it does not. This could potentially cause issues at payment time. Taking a few minutes to review yours could help you get paid faster in the future.

E. Run credit checks – for new and returning customers

Most businesses perform credit checks for new customers before offering credit terms – but as is often the case, many fail to do this on their existing customers. This is a potential risk to your cash flow, as circumstances change and your original findings may be superseded, or your terms have changed.

F. Utilise trade associations (Professional Memberships)

Another way to check the creditworthiness of your customers is to join a trade association where you may share and access important creditor trends with peer groups. It’s often a surprise about the information available and what you learn about your prospective/current debtors. Here at Gravity Credit Management, we have, and can compile aggregated information from several sources.

G. Obtain a debt collection estimate

While debt collection may be a step too far for some clients – in terms of their reputation being damaged – think about it from the point of investing too much resource into chasing overdue invoices and your performance isn’t as effective as it could be. Collection companies such as Gravity Credit Management have been doing this for many years. We treat your debtors as if they are our own – because ultimately, they are. With the added weight a third party brings, the chances are you will get paid sooner – something we all want!

H. Offer a last Letter Before Action

While it may seem odd – often the most effective form of a call to action (pay the account) is the threat of a debt collection agency – which can spur debtors into action and payment! Be mindful this process could damage your relationship so consider all your options carefully.

If you have any queries or questions, please get in touch with us at [email protected] or call us on 0800 GRAVITY. We would be excited to help you and have you as part of our business.

CONTACT US
Andrew Kingstone, Managing Director
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