Maintaining a nice, healthy and consistent cash flow coming into your business is critical for business success. Keeping on top of your credit control by chasing late payers plays a big part of your cash flow health.
You may find that your credit control gets put to one side when you’re busy as you’re focusing on generating new income and sales, but in actual fact your credit control is just as important as this.
Set time aside each week or month, depending on how often you invoice to make time for your credit control.
If you’re finding it difficult to do this you can hire a bookkeeper who will support you with your credit control and other aspects of your business finances.
If you have a lot of late payers and it impacts your cash flow each month regularly then maybe consider offering a small discount if they pay early. Only do this as a last resort because of course you want to bring in as much money as possible.
Introduce payment links such as Stripe or GoCardless to your invoices so that it makes it easier for people to pay. Remember the easier you make it for people to pay, the quicker they will pay you. They have busy lives too just like you. If you have software like this integrated with your accounting software it should reconcile automatically too.
We use Xero for all of our clients' bookkeeping. When you create your invoices in Xero you can set up automations to chase payment. However, the only issue with this would be if you don’t regularly update Xero with payments you have received against the invoices then people may get reminders when they’ve actually paid. If you’re going to use the automation you will need to be on the ball when it comes to reconciling your accounts. That’s another thing we would do for you as your bookkeeper, you could leave it all to us so that you can focus on new business.
Having a clear process in place when it comes to managing your credit control will make it much easier to keep on top of. We find that when managing credit control for businesses we learn who the regular late payers are and we know who usually pays on time. By knowing this information we can personalise the chasing of payment and know how long to leave it before chasing particular clients. We will also analyse your historical data so we can produce a forecast in order to try and improve your cash flow.
If this sounds like something you would benefit from getting support with then we’d love to hear from you.
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