Here is a Guest blog from Tracy Baker of Coffee Not Included, focusing on how to get your credit control working properly – and ultimately get paid quicker… or, for some, get paid!
This was an email I recently received from one of my clients, thanking me for successfully taking on responsibility for their credit control. This particular client is highly accomplished in what he does and has incredible entrepreneurial spirit.
When we met his biggest worry was that he was owed an awful lot of money, we are talking large sums here! You see, he was busy working on getting new business and very pleased to be able to invoice people quickly for the work he had completed (using the cloud accounting system I had transitioned him to), however … as I often see with busy business owners … , before we put this credit control in place, the invoices just sat there, unpaid and had over the course of a couple of years, accumulated to a substantial sum. My client had, periodically chased debtors as and when he had the chance, but this was sporadic to say the least, and the people he was chasing quickly worked this out!
Many business owners find that collecting debts from the clients is an awkward conversation to have as they don’t wish to ask for payment for fear of upsetting the relationship. I’ve developed good relationships with his customers, working as an extension of his company being polite but firm in requesting payment whilst remaining neutral
Cash is the lifeblood of your business. Every invoice that is outstanding is costing you money and exposing your business to the risk of bad debt. I often say to clients, they wouldn’t go to Waitrose, buy their goods and then leave without paying so why should this happen to you!
With many years experience I quickly set up a process for dealing with his bad debts and, as you can see from the email he sent me last week we’ve had a great deal of success, getting almost a third of his outstanding money in within a couple of months.
If you want to get your cash flowing in to your business, email Tracy – email@example.com