Date: 15th September 2015
Here’s an interesting fact about debtors for small business owners: when asked why they haven’t paid, just under a third of customers say their invoice shows incorrect items or amounts. And just over a quarter of customers don’t pay because the invoice was sent to the wrong email or person.
This is crazy – a far too large portion of customers don’t pay due to avoidable problems. So it makes sense to a) stay on top of your receivables to keep track of what’s paid and what’s not and b) promptly reach out to debtors if you’re not getting a response.
How do you do this?
Online software such as Debtor Daddy makes staying on top of your debtors easy by automatically syncing daily with your online accounting software. All you need to do reconcile your bank accounts and the software does the rest. Once you have ascertained who hasn’t paid, you can get on to the next step of following up with reminders.
Invoice reminders don’t have to be a negative experience for your customers. In fact by tailoring reminders to each customer you can increase cash flow and loyalty at the same time. The trick is to be eloquent, consistent and persistent.
By sending a friendly, non-threatening email you give your customer the opportunity to raise concerns they may have (eg, incorrect items or amounts) rather than them brooding over it and not paying.
With nifty software such as Debtor Daddy, you can customize your reminders to show the invoice details you want, including payment terms and payment options to remove any roadblocks to getting paid.
Going back to our earlier point about invoices going to the wrong email address, no amount of email reminders is going to make a difference when your emails are going to the wrong place! So this is when it’s time to pick up the phone.
Again the best approach is friendly and non-threatening. “Just checking in to see if I have the correct email address and make sure you received my invoice.” You will often find it’s a simple case of resending your invoice to the correct email address. It may also be a good opportunity for your customer to raise a concern or issue they have with the invoice, perhaps something that is easily fixed with a quick chat.
With this simple three step approach, you will find that most of your debtor problems can be resolved quickly and efficiently. And if this doesn’t work, then it’s time to take more serious action. More about that another time!
The interesting facts about debt collection came from this blog by Debtor Daddy.