How your business can combat Late Payments
How your business can combat Late Payments
What Causes Overdue Invoices & Late Payers
Late payments and debts are an unavoidable reality for businesses in any industry. Despite the best efforts of
companies to ensure that their customers pay on time, there will always be times when customers fail to do so. This can be a stressful and overwhelming situation for anyone to deal with, even the most experienced credit controllers
and accountants.
Unfortunately, it is not an uncommon issue for customers or clients to ignore emails, calls, and other forms of
communication when they are experiencing financial difficulties. Often, this is because they may have no intention of paying or simply do not want to face the problem. It is important to understand that this behavior should not be
tolerated and there are ways to manage these situations in a professional manner. In this article, we will discuss how to effectively address late payments and overdue invoices and how your business can better prepare for them when they
come up.
Improve Your Invoice Process and Send Prompt Reminders
Prevention will always be far better than a cure, the easiest way to avoid overdue payments is with clear payment
terms stated in your contract with your client. Creating a clear and comprehensive contract is the first step in ensuring that you receive your payments on time. It is important to ensure that all parties involved understand the payment
terms and conditions, so that there are no misunderstandings or disputes later. A well-drafted contract should clearly outline the payment schedule, penalties for overdue payments, dispute resolution procedures, and any other relevant
information. By having a clear and binding contract in place, both parties can rest assured that payments will be made when expected. On top of having a clear and comprehensive outline of your business’s payment policies, having a schedule for sending out payment reminders is fundamental for good credit control practices. Sending prompt reminders to clients is an effective way to reduce the number of overdue invoices and ensure that payments are made on time. By
sending regular reminders, businesses can keep track of their clients' payment status and take necessary action when required. This not only helps to reduce the number of overdue invoices but also helps to maintain good customer
relationships.
Utilities robust processes for dealing with Late Payment situations.
Invoice chasing is a critical activity for businesses to ensure that they get paid on time. In some cases, a gentle reminder may be all that is needed to prompt payment, particularly if the invoice has been misplaced or genuinely missed in a busy inbox or during annual leave for example. To be even more proactive, you can set up your accounts system to send invoice reminders before the due date to try and prompt payments being made on time. When emails or letters fail though, we would recommend that invoice chasing is done via the telephone. That way you know that you have spoken to somebody that can help resolve the issue rather than sending an email and not knowing if it has been read or not. Always keep the conversion polite but to the point and present a series of options rather than an ultimatum on payment.
What to do if communication breaks down
When communication breaks down and you cannot get a repayment solution, or you are unable to contact your debtor
you may want to consider handing the debt over to a specialist debt collection agency. This is a great option for businesses who do not have the time or resources to pursue the debt themselves or have exhausted all other options.
Debt collection agencies are experts in recovering payments and can provide advice on how best to proceed with your case. They will also take on the burden of dealing with any legal or administrative issues that may arise in the
process. When chasing a debt, expert advice and guidance is essential to ensure success and avoiding complications and further delays in repayment. It is important to understand the legal rights of yourself and your debtor, as well as the various methods available for debt collection. With the right advice, it is possible may be possible to negotiate
a plan that works for both parties that was not possible while negotiating without a third party. If you are struggling to manage your debt, it is important to understand what options are available to you. Speaking to a debt collection agency can provide you with a free appraisal and help you understand your chances of recovery. It is important to understand the process and the various options available before taking any further steps.
Consider Outsourcing, your Credit Control and Debt Collection Process
Outsourcing certain functions of a business can be a great way for savvy businesses to focus on running and growing their business. By outsourcing especially complex and time-consuming tasks like credit control, businesses can free up their internal resources and allocate them to other tasks. This allows them to focus on the core aspects of their business, such as product development, customer service and marketing. When it comes to debt collection, it is important to choose the right partner they will back acting on your businesses behalf and carrying your reputation with them. With so many debt collection agencies available today, it is essential to do your due diligence and make sure you are working with an agency that will provide you with the best service. This includes researching the agency’s reputation, customer
reviews, and any other information that can help you make an informed decision. By doing your own research and making sure you have chosen the right partner for debt collection, you can ensure that your business will be in safe hands.
