Chasing debtors – 3 easy strategies that will help you get paid quicker
Getting paid is always an exciting part of running a business. What is not as exciting however, is keeping on top of clients when they do not pay their invoices. According to the Commercial Collection Agency Association, after 30 days past due, the chances of being paid drop to 89.9%; after six months, there is only a 52.1% chance of being paid.
Below GoFi8ure has listed some simple strategies that can help bring payments in on time, whilst maintaining good relationships with your clients.
1) Regularly review your Aged Receivables detail report
Your Aged Receivables detail report should be your “go-to” credit control report for checking the total amount of outstanding invoices per each client and totals. Make sure to keep an eye on anything that is showing as 30+ days overdue. The longer you leave it, the easier it is for your client to forget or ignore your invoice.
Tip: Keep your bank accounts reconciled and up-to-date so that your debtor reporting is current and accurate. By following the steps below, you will see each invoice per client and how overdue it really is.
2) Save time by emailing all your client statements in one go
Statements are a great way to prompt your clients to pay you. By sending a statement your clients can see their outstanding invoices and payment history at a glance.
Go to Accounts > Send Statements > Select the “Activity” statement type > Choose the first day of the month prior to the current date > Update > Select the clients who have a balance owing
The great thing about Xero is you can send up to 50 client statements at a time. You can also customise your statement template should you wish to do so.
Tip: When sending bulk statements make sure to untick any contacts with a $0.00 balance. It is also important to ensure that all contact details are correct for each client. A statement can not be sent without an email address.
3) Use Automated Reminders
At times, even though invoices get earmarked for payment, they can still slip to the bottom of the to-do pile. Automated reminders may be the cure. They act as a gentle nudge that will help your chronic late-payers remember to pay the due invoice.
Xero has a feature that allows you to send automated invoice reminders, all you have to decide is when and how often the reminders are sent out.
Go to Accounts > Sales > Awaiting Payments > Click on the Invoice Reminders Off > Set up the reminder template and frequency
With Xero’s automated reminders you can customise the tone and timing of when the email will be sent. It can take a small amount of time to set up, but choosing this option will save you hours in the long run. To find out more click here to watch a quick video.
There are so many amazing features available, if you would like a Xero refresher training session please send us an email or call us on 0800 463 488.