Everyday Tips

The Late Payment Crisis

Bright Beany By Katy Dales

Canva laptop and coffee

Do you feel like you are always chasing customers for payment? Well you aren’t alone; Whatever the reason given for late payment, this can impact your business significantly, from cashflow issues to wasting your precious time chasing customers.

Chasing bad debt is important, but you can’t keep spending money trying to recover the debt and you also can’t let bad debtors get away with not paying.

So how can Bright Beany help?

There are a few simple steps you can take that will reduce the time you spend on chasing bad debt, and increase the number of customers paying you on time.

Move to digital accounting software

Moving to a digital accounting software, such as Xero, helps you stay on top of your finances, making it easier to record and analyse your data and reducing the risk of human error.

A digital accounting system will keep a record of all the invoices you have sent, along with payment due dates and customer records. No more paper notes or excel files – accounting software can do all of this for you.

Use your accounting software to help

Use your accounting software, like Xero, to automate chasing payment from your customers.

With Xero, you can set up auto invoice reminder emails to your customers, meaning you don’t spend time chasing these yourself.

Xero can also send out reminder emails in the days leading up to a payment deadline, which increases the likelihood of being paid on time – and you don’t need to lift a finger.

Use bank feeds to link your business bank account

Ensure your business bank feeds are directly linked to your accounting software. Manually reviewing statements each month is time consuming and prone to error; you may end up missing a payment from a customer and chasing them unnecessarily.

When payment is made, your system is automatically updated as your bank feed is linked to the software.

Consider the use of debt factoring

Debt factoring is when a business sells its accounts receivables to a third party at a discount, enabling companies to immediately unlock cash tied up in unpaid invoices without having to wait the usual payment terms. Debt factoring is basically another term used for invoice factoring - as a business you will receive less cash than collecting directly from your customers, but you will receive it immediately, allowing you to invest it quickly into other areas of your business!

So there you go, a few simple steps that will help you improve your debt collection process and unlock cash to invest in growing your business!

We’re dedicated to saving your business time and money. 

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