A debt recovery expert is offering her tips for managing debtors in the New Year.
Suzanne Dean, debt recovery manager for Lancashire law firm Napthens solicitors, explains that many small businesses wound down for Christmas and New Year breaks, and will now find themselves with a number of unpaid debts that would in other circumstances have been properly followed up.
Such businesses should look to get their debtors under control, collecting payments from those which owe them money.
Suzanne warns that minimising debtors can help a business as it can reduce an overdraft and associated interest charges.
She gave her top tips: “Businesses should review the payment terms they offer and make them clear on invoices. Consider seven or 14 day terms instead of 30 days.
“Next, offer options for payment that make you easier to do business with, for example the use of Paypal and direct debit can allow money to be obtained earlier, without waiting for cheques to clear.
“Offering a discount for early payment may be worthwhile if the discount is less than the interest being paid on an overdraft. Send invoices promptly – waiting until end of the month will extend your payment terms further.
“Finally, review debtors regularly. Sort invoices by their due date to spot any past this period, and contact overdue debtors promptly and issue a statement or reminder as soon as an invoice is overdue.
“There is much that can be done to make collecting payments easier, something which is vital for any business but particularly for small ones.”