4 Ways to Improve Debtor Management
One of the most critical components of cash flow management for SME business owners is staying on top of creditors…
1. Improve your invoicing
Make sure your bills are clear, consistent, and include all necessary information (e.g. purchase order number, payment terms, international payment details and so on). This will assist to eliminate confusion and unnecessary delays while clarifying even the slightest detail.
2. Automate your billing system
Invoices sent online not only have a higher possibility of being paid sooner, but they may also be conveniently accessible and processed by your debtor. Furthermore, you’ll have a record of when the invoice was delivered and received, which might be useful if there are any future issues. Not only that, but you can set invoices, reminders, and alerts in your system to avoid items sliding through the cracks.
3. Use payment terms efficiently
You might give an incentive for early or timely payment depending on your cash flow situation and individual debtors. You can also agree on full or partial payment in advance. Payment periods can be creatively flexed to match corporate needs.
4. Maintain your vigilance
If your invoicing system includes tracking and swiftly following up on payment milestones, you must be vigilant in monitoring this process and acting on danger indications. Maintaining open lines of communication and addressing concerns immediately and transparently are crucial to the success of your company. Complacency and burying one’s head in the sand are not viable solutions…
