Dealing with debtors, responding to their reservations, and keeping a check on how things go with them can be a tough task. Overseeing indebted individuals is upsetting but doing so is essential to your revenue streams. Late payments can result in business challenges such as an inability to invest in a timely manner. Thus, you need to set up the correct procedures to drive on-time payments from clients. Below are 5 tips that can help with managing debtors better:
1. Establish payment conditions before transacting with a client.
How and when customers pay you will vary depending on the products or services you offer, but you must establish the conditions for payment before fulfilling your part of the bargain. If you offer legal services, for instance, a good strategy before you begin would be to establish all criteria for payment, especially the amount to be paid and the payment deadlines. Take such measures to avoid disappointments or oversight by your clients.
2. Automate your payment reminders.
Reminders are important, and if timely reminders are sent to the clients, then the recovery and payment process can be smoother. Thus, your business should have a proper system for recording sales, invoices, and due dates. This system should allow you to filter for late customers or send automatic alerts on late payments to clients. Bookkeeping platforms like Vencru provide these features by helping you track every invoice issued to a client and sending notifications to your clients when payments are overdue.
3. Increase payment options.
Having only one medium of payment for your business can be a great disadvantage, especially if you run a small business. In fact, this could be a major reason why debtors keep piling up. At the same time, increasing your payment options improves your customer experience and ensures you get paid faster.
With Vencru, your customers can pay any way they want–cash, cards, or bank transfers. They don’t have to think too much about payments, and you don’t have to think too much about making money. It’s a win-win.
4. Discuss financial issues with debtors.
Sometimes, clients go through financial difficulties, and it becomes hard to make payments on time. In such situations, one must employ people skills to discuss with the client and work out a way to get the payments on time. According to the Synectic Group, if such a process is not taken into consideration, payments can stop and you’d be left with less in your account as compared to the services you offered.
5. Stay in contact with your customers.
In today’s world of fierce market competition, keeping in touch with your clients can mean the difference between business growth and business failure. It gets even more important when some of these clients are debtors, and thus client management should not be taken for granted.
Vencru ensures you form professional and personal relationships with your debtors. For example, you can prepare a debtors’ list, a statement that breaks down your debtor’s activity with your business and keeps them abreast of how much they owe. When you show that your business is trustworthy, your debtors will not only pay up but also keep coming back to your doorstep.
Managing your debtors can be a tough task, but when done the right way, you can turn them into not just paying customers but also repeat customers. Be sure to apply the tips above and keep the money coming in! You can learn about the 5 bookkeeping mistakes business owners make.
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