Shakespeare Martineau
Whether your business is sailing smoothly, treading water or struggling during these tough economic times, having a reliable collection strategy is integral to remaining solvent. Jayne Gardner, head of debt and asset recovery at Shakespeare Martineau’s Stratford-upon-Avon hub, shares her top tips for improving cash collection.
Review your overall invoicing and cash collection strategy and ensure it is someone’s responsibility within the business to manage this vital task. Asking people for money is difficult so ensure adequate training is given to enable them to do the job properly and well.
As a business, you should not be waiting until a payment is due to start chasing debt. If you know when your customers set their payment run, call them to check your invoice is included. This can often be done under the guise of a customer care call, checking if they happy with your service or product, for example.
Keep calling your customers at regular intervals until you receive payment. Customers will almost certainly divide invoices into urgent and ‘can wait’. If you keep calling, you keep your invoice top of their list.
If payment is still not forthcoming, do not delay in starting the formal proceedings and contact a debt collection expert. If you work with the correct third party, they will support you in the collection of your debts, without damaging your reputation.
Finally, review your terms of business. When many businesses start out it is often the case that the terms of business can be a slight afterthought, often ‘borrowed’ from somewhere else or found on the web. In order for a business to claim all monies due to them, it is vital to ensure your terms are drafted correctly and include several very key elements.
