Chasing for Payment, Managing Aged Debt And Credit Control
Not chasing for payment is probably the biggest mistake that most small businesses make when they start-up. You have a great business idea (goods or services) and possibly you’re great at selling but it isn’t a sale until you get paid.
Don’t just “expect” to get paid!
Don’t fall into the credit control trap of being hit with a late payment without having a process already in place for managing aged debt. Chasing for payment is vital for the survival of your business, you must have processes in place so that you are in position to deal with late payments before it is too late.
Invoices = assets
Unfortunately, not everyone pays their bills on time. In fact for many businesses unpaid invoices are their largest asset, and unbelievably many actually have a policy of not paying invoices until they are chased for them, or will only pay those that shout the loudest. The are businesses out there that have raised the cheques to pay invoices, and literally leave them in a drawer, and as soon as they are chased will then send the payment out.
It is unfortunate but true that many businesses will use this tactic to actually improve their own cashflow as well as chasing to get their own payments in – they will delay making payments out, as they feel it is better in their own bank than in yours!
It is therefore critical for every business whatever sector you are in to keep track of your invoices, to monitor regularly which ones are unpaid beyond their terms, and to have a process for Credit Control (payment chasing) already in place, so that you know what you will do as soon as a payment falls overdue, and before it affects your cashflow.
Ultimate Credit and Collections Handbook
Invoicing Clients Effectively
Managing Your Cashflow
Credit Management Tools
Payment Terms Definitions
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