A growing issue for business in the current economic climate is customers taking longer to pay. This results in debtors increasing and the bank account reducing thus putting pressure on cashflow. It also increases the risk of having a customer going broke and you not getting paid at all. The below is a list of tasks that should be completed by every business to ensure they keep control of this situation:
- Review your Aged Receivables listing at least once a week.
- Ring any customer that is overdue with their payment. When you talk to them always get them to commit to a payment date and then diarise this date so that you can follow them up if payment is not received.
- Review the diary entries every day and ensure all non-payments are followed up.
- You must be prepared to stop supplying a customer if they continue to not pay. This will limit your exposure if they do go broke.
- If a customer still does not pay within 7 days of you stopping supply you should commence legal action to collect the debt. There are a number of ways to do this:
- Pass the debt to a debt collection agency to attempt collection
- If the debt originated in Queensland and is under $25,000 you can attempt to collect the debt through the Queensland Civil and Administrative Tribunal.
- Pass the debt to a solicitor to attempt collection
If you have any questions or need help with any of the above or require general financial consulting, please contact Brett Robinson at Acuro. Brett has over 20 years’ experience in dealing with Debtor control and improving cashflow.
