Thursday, 6 December 2012
Collecting debts before Christmas
With most businesses shutting from 21st of December probably until 2nd or 7th January, it is likely that there will be a sharp freeze in payments to suppliers and therefore creditors. It is likely that debtor days are going to rise sharply. For many businesses this will be the biggest recent test of all.
So look now at your cashflow, who has promised to pay your business this month? I suggest you ask if they can accelerate this payment so you receive it before 21st of December. Make sure someone is on the phone to all debtors now asking for payments. The recent cold spell is forecast to get worse so you don't want it to become an excuse for your customers not paying.
Perhaps plan to go into the office and see if there any payments that have been sent by cheque just before Christmas, get them banked. On the 2nd or 7th January be FIRST on the phones to chase payments in.
This may seem tedious and unnecessary, BUT it is your business's lifeblood we are talking about.
Get the debtors to pay you and keep your creditors informed and paid when you can.
If you have a larger business then it may pay to get a specialist debt collection agency on board. They are not simply more aggressive but they are effective because they do not have the emotional attachment to the customer and they can be persuasive without compromising your relationships.
Remember the best customers are those that actually pay you!!