Did you know that you still have to pay tax on your debtors, even if you haven’t yet collected them? So, how do you collect your debtors faster?
– Agree your payment terms at the time of sale.
– Ensure your customer signs your Terms of Trade before you start the job.
– Include a guarantee in your payment terms.
– Invoice as quickly as you can.
– Ask for a deposit prior to starting the job.
– Change your payment terms to within 7 days of invoice or on delivery.
– Send statements with only two columns – current and OVERDUE.
– Follow up the day after the due date.
– Have someone other than the owner be responsible for collection of debtors (owners are usually too soft!).
– Document any changes to your standard payment terms in writing.
– Use a debt collector sooner rather than later – the longer you leave it, the harder it is to collect.
– Don’t provide credit to customers who’ve been late payers in the past, and don’t offer more credit to customers with outstanding payments.
“It’s the squeaky wheel that gets the oil.” – Anon
Need help developing your Debtor Management Policy? We can help… get in touch!