You analyse your numbers month by month. Your overheads are reasonable and there’s no wastage. But what about your debtors?
Good debtor management can make a real difference to cashflow in your business while poor debtor management can be a major roadblock.
'Remember that credit is money' Benjamin Franklin
If your business isn’t strictly ‘cash over the counter’ you probably already understand how much work it takes (and how frustrating it is) to chase money from late payers.
You can have a lot of money tied up in debtors that you could use better elsewhere to keep driving the business forward. Think about it this way: the money you have tied up in debtors is your (reluctant) investment in your customers’ business. Wouldn’t you rather invest in your own business?
Debtor management can be hard to figure out with not much to show for it. People don’t like to deal with it, they fit it into the cracks with their other work, so it usually just gets worse. It sucks up time as you try to unravel invoices, statements and call logs. It’s unsatisfying work that can almost never be completed in one block, requiring you to follow up with debtors repeatedly.
The key to managing debtors is not to let it get away from you. Systems help. So does training your staff. Call us if you want to talk through your debtor numbers and put together a better system to manage debtors in your business.
