Credit control services for business - protect cash

Credit control services for business – are you protecting your cash?

Many businesses we speak to swear-by one thing, and that is cash is king.

It is a much-used phrase in the world of small-medium sized businesses but the next consideration is how do you treat cash as king? Good, reliable credit control services for business, particularly for SME turnover companies, can be the lifeblood of their organisation and is often as important as the survival of the business.

Imagine a debt has not been chased until 60 days overdue.  The company owner believes the invoice has been sent out and therefore payment will “automatically get paid” on 30 days, and thinks after speaking to the customer who didn’t have a copy of the invoice that payment on the following month (another 30 days) won’t do any damage.  The following month on the due date (90 days) the customer raises a rate query on the invoice and this then takes 30 days back-and-forward in emails to prove the right figure was quoted and then the invoice will be paid on the next months payment run.  We are now at 120 days, and good credit control services for business would have provided that business-owner with the resolution to these delays within days, not months.

Here are some points that credit control services for business can help with:

  • Pre-emptive action – Call before the invoice is due, make sure they have a copy and that there are no problems with it (HINT: they nearly always tell you a payment date in this call, often without asking)
  • Timely follow-up – Call on the due date and ensure credit control services for business procedure is followed, and then confirm the payment date is within the next 7 days
  • Fast action on late invoices – strict procedures are crucial and knowing when to escalate the Debt to a 3rd party or Solicitor could be the difference between your business survival and its struggle to stay on the right side of a bank overdraft.

Fast, professional, and punctual credit control services for business can help you improve cashflow, reduce debtor days and earn respect from your customers that you are an organised and professional operation.

If you would like to chat about how we might be able to help you out with credit control services for business, please don’t hesitate to give us a call on 0843 309 1633 or email enquiries@tauruscollections.com

Recover aged debt

How do you recover aged debt?

Over the years, our clients often ask us what is the most-effective method to recover aged debt.  It is an age old question in a shaky economic recovery and we find the simplest way of looking at the problem, is to keep it simple.

To recover aged debt you need to have very strict procedures in place that your whole company can follow.  With our clients being of all sizes, from 1-100 staff members, the same policies should be in place for the unwanted problem of collecting debts.

Here are 3 steps to follow when you are looking to recover aged debt:

  • Call your customers – you will be surprised how many debts we handle from clients that have never actually received a call about the debt.  This can often be due to time-restraints or resources, but this is crucial to “dealing with the problem head-on” and resolving the issue quickly.
  • Send letters – there should be a combination of letters and calls when you want to recover aged debt quickly, so if after 45 days you have not received payment, send a 7-day letter, then quickly follow-up with a final demand, interspersed with 2 calls to ensure full communication has been made with your customer.
  • Speak to a 3rd party – once a debt has gone beyond 60 days old, and you have not received a response from letters and calls, chances are that your customer either can’t pay or won’t pay.  At this point, you will be taken less seriously, and in-house collections are up to 80% less effective.  Only escalation to a 3rd party often warrant the best and quickest outcome when you are looking to recover aged debt at this stage.

 

It is imperative that business owners implement a credit policy of this sort when dealing with late-payers because standardised procedures will demonstrate to your debtors that you are serious about getting paid.

When you want to recover aged debt in future consider the procedures above and don’t leave it too late by letting your debt go bad in 2014.

If you would like a no-obligation chat about how to recover aged debt or any specific debt issues you are facing, please don’t hesitate to call us on 0843 309 1633 or email enquiries@tauruscollections.com

Collection of a Debt

Collection of a debt – getting your customers to pay!

Collection of a debt – how to win over your customers and get them to pay!

Here’s a few rules when considering how your collection of a debt will be most successful, in tough economical times, getting your customers to pay you is more of a science than an art:

1) Keep talking – constant dialogue between you and your customers is important for collection of a debt because you are always on your customers mind, even if their next invoice is not due for another week, put in a courtesy call to make sure there are no issues BEFORE the invoice becomes overdue.

2) Invoice quickly – you cannot perform a collection of a debt until your customers payment terms have run, and so it’s crucial your invoicing is up to date and issued on the day of the sale, preferably emailed PDF so you have a trail of who you sent it to, and there can be no “lost copies”. Invoicing quicker means you get paid quicker.

3) Use your resources – if you have a problem and collection of a debt is an issue, meet with your sales team and get them involved in the collection of a debt. This was their sale after all, they should take responsibility – a sale is not a sale until the money is in the bank.

4) Speak to a professional – seek out a solicitor or collection agency for professional advice. These experts usually provide a free consultation and assess your chances of a succesful collection of a debt, some will not charge you a penny until the collection of a debt has been made – so a great way to do business, free up your time to get more sales and keeping your cash-flow healthy.

This is just a brief snippet of how the burden of collection of a debt can be eased when you implement just a few procedures in your business and take time to understand that collection processes do not always have to be long drawn out affairs.

Remember your cash-flow is king, and it is imperative to your businesses survival to keep on top of your collections. Debt collection keeps you in business!

Collecting invoices

Why is it important for SMEs to consider collection agency rates?

For most businesses these days collection agency rates are crucial when choosing a collection agency that is right for them, whether they be locally based, be the biggest in the business, or recommended by a business colleague: the decision can usually boil down to price. Collection agency rates, when considered as a small % of the debt collected, can be extremely reasonable and cost-effective to an SME. Once you factor in the time it takes to chase your debts, let alone the stress involved in typing up letters and follow-up action to cement a payment date, and then the customer not paying on that date anyway, collection agency rates work as a productive expense to your business.

A collection agency will often charge on a no win – no fee basis so in terms of your cash-flow this is the best way to do business. Only once your debt has been successfully collected will an invoice be issued to a business for the service, effectively saving you hours of time chasing your money, and outlaying zero money until you get paid.

Collection Agency rates which are competitive are usually calculated on the basis of a successful collection of 3-10% of the debt, which is a small price to pay to set against the time, money and resources an SME would have to put in to successfully collect yourself.

Not least, also, a collection agency knows how to communicate with your customer: in a clear, firm way, and has the technology to schedule follow up action and instigate litigation if necessary. It is imperative collection agency rates are set according to the % debt, and the effectiveness of speed in contacting your customers we feel outweighs the savings on any fees you might not have considered before.

Always consider competitive collection agency rates when protecting your business from bad debt – good debt collection keeps you in business!

Collecting a debt

Many small to medium sized businesses in the UK will employ a credit controller when collecting a debt and to manage their debt collection processes, some business owners even do it themselves in order to save time (by not having to tell someone else what to do) and money (by not paying an agency or outsourced company). However, this can be a false economy.

In-house debt collection can be effective to a point, and it is imperative to maintain strict credit control procedures when collecting a debt for new sales, but it is the time, money and resources in keeping up with the bad debts that we hear about most. All too often, we speak to business owners admitting their customers have “gone under the radar” due to having:

1) new business to gain

2) staff to manage

3) more important debts to chase!

We find a pro-active approach to collecting a debt is the most successful, pay close attention to your new debts, but pay even closer attention to your old debts. Collecting a debt is a time-consuming and arduous job and a Collection Agency has all the tools, and patience, to help you as a small business.

Is collecting a debt a problem for your business? Call us on 01332 565350 for a no obligation chat to see how we can help you out.

Business to business collection

Business to business collection – review your procedures to maximise your cashflow!

5 tips on how to maximise your cashflow and business to business collection!

With the UK economy looking ever-more unstable and growth on a less than steady course, it is more important than ever to implement strict procedures for business to business collection of accounts. You should look at trying to recover cash owed to you as swiftly and as cheaply as possible. You can achieve this by constantly reviewing your debtors and reinventing ways to encourage your customers to pay you on time. Small changes to the daily practices in your business, which can take very little time and effort to implement, can have a major positive impact on your long-term cash flow and ultimate sustainability.

Below are 4 things you can do today to improve your chances of getting paid on time, follow these and you are well on your way to boosting your companys cash collection rates:

1) Send Invoices ASAP – the quicker you invoice the quicker you get paid. For business to business collection, as soon as a job is finished get an invoice out to your customer. If they are with you when the job is completed, or if you can meet-up, then even better: hand it over in person and ask for payment . Even if you have agreed payment terms, a personal request face-to-face for payment can go a long way, and they may even write you a cheque out there and then.

2) Invoice accurately – make sure all the details on the invoice are 100% correct, phone up the customer to re-confirm if you have to. Getting it right first time can save a lot of delays further down the line when you need to get paid.

3) Call BEFORE the Invoice is overdue – why should you wait until an Invoice is past agreed payment terms until you start asking for payment? If you have agreed 30 day terms, phone up your customer after 14 days to make sure they have received the invoice and that there are no problems, then call back 5 days before due date to confirm they have your bank details for payment and if they have finalised a payment date for the Invoice. This keeps you ahead of the game and business to business collection as SMEs is all about being proactive – not reactive.

4) Give your customers payment options – on your Invoices you MUST include your bank details, address to send cheque to and who it is payable to. A common excuse we have heard in the past is that we didn’t have your bank details. Don’t let them use this excuse and always try and email a copy of the Invoice so you can refer back to your records for having sent it. If you can set-up an online payment system or credit card facility this is even better as this is quick and easy.

Remember, the implications of not getting your business to business collection solution right are grave. If you are owed amounts of money and your customers are dragging their heels, it is essential you take swift debt collection action to protect your long-term survival as a business.

Collection of invoices

Collection of invoices – 4 tips to protect your cashflow!

Many of our clients find collection of invoices can be a drain on their company’s resources of time, money and hassle. It is certainly true that due to the recent economic downturn SMEs are finding it ever more difficult to convince their customers, to who they extend credit in good faith, that payment should be made on time. After all, credit is a privilege not a right and you should not be faced with problematic collection of invoices when you put your trust in a customer to pay.

Whilst late-payers are often inevitable in this, and any, climate there are certain measures you can take to keep your cashflow pumping – ensuring that problems involved with collection of invoices are kept to a minimum:

1. Get a credit policy – this is essential to your business. Just as much as a business plan and a marketing plan. Without a credit policy your business is not making money but lending money. There has to be set procedures that your entire workforce can follow, so that they know your business is in business to make money. Search online for “Credit Policy Template” to get an idea and consider drawing one up immediately.

2. Make your customers apply for credit – a credit application can be the most important document you have as it holds all the details about your customer PRIOR to doing any work. From this you can check Trade references, bank accounts, credit history, address, contact details – all of which are crucial to locating your customer should they default. You MUST check out Trade references and find out if their previous suppliers have had problems with collection of invoices the past – any leniency in this department and you are setting your business up for a bad debt.

3. Maintain contact with your customers – once an invoice has been raised, call your customer after 14 days to make sure there are no problems with the invoice. Then 1 week before it is due make a courtesy call to ask if they have a payment date for the Invoice as you are putting together some cash-flow projections. The customer will not mind if the conversation is light, and by now if there is a query on the Invoice they will have had 2 opportunities to flag it up. This pro-active approach can often be crucial to timely collection of invoices, but is often overlooked by SMEs.

4. Invoice on time – one of the best actions you can take, that is in your control NOT your debtors, to speed up collection of invoices is to actually Invoice quickly. If you have a monthly date on which Invoices are sent out, consider revising this to weekly, or even on the day the work was completed. Quite simply: the quicker you invoice your customers, the quicker they can pay you.

There are many other preventative measures you can take to assist in your collection of invoices, but above are a few and this list is by no means exhaustive. Stay on top of your credit terms, remember you have worked hard to get your business up and running, successful collection of invoices keeps it that way!

Collecting Commercial debts

Collecting commercial debts – are you wasting your time?

In the modern business world, collecting commercial debts can be challenging at the best of times. Coupled with a possible deepened recession and the banks, despite all their bailouts, continually refusing to lend money to SMEs, then your company is likely to suffer cashflow issues right now, or soon will. But there are certain methods you can use to save time when collecting commercial debts, because time is the key to improving cashflow – the less time you spend on phoning your customers, writing to them, threatening to sue them, emailing them to gain payment – the more time you have on growing your business from new sales and spending your time doing what you are good at, and that is running your business.

We have found the biggest reason any clients of ours find our services useful as an outsourced credit control function is: time. Time is crucial in business and by outsourcing duties from your day-to-day activities you can save huge amounts of all important time and energy. For SMEs who want to stay on top of their cashflow, not have the expensive operation of employing a member of staff, and operating on a no win – no fee basis, a collection agency for collecting commercial debts can be extremely cost and time efficient.

Next time you find yourself wasting mornings, afternoons and early evenings trying to call back your customers for that all important payment promise that never arrives, think about instructing a collection agency because your customers will know you are serious about collecting commercial debts.

Top tips:
1. Place an account for collection the earlier the better – our client’s best chances of successful collection is when an account is placed with us as early as possible, usually around 60-70 days after the invoice date. There is more chance your customer is still where they were when they were Invoiced originally, and all contact details are the same.

2. Keep in touch with customers – do not just invoice and then expect them to pay. Reminders need to be sent every week, and phone calls in between which gives a progressive level of seriousness.

3. If you threaten legal, ALWAYS follow through – once you have advised your customer you will progress to legal stage then you must go through with it. If you keep extending the deadline week after week, the debtor will never take you seriously.

Above are just a few tips to remember when collecting commercial debts and should provide a good base for improving your cashflow, or for deciding whether to utilise a 3rd party debt collection agency. If you require any help with your overdue accounts, or simply would like a no obligation chat, please don’t hesitate to contact us enquiries@tauruscollections.com

Collecting Money owed

Collecting money owed is survival for your business

After recent government figures showed us in the news just last week, the economy is continuing to struggle. All signs point toward a difficult 2012 for many businesses and collecting money owed from customers you have already supplied will be crucial to SMEs survival across the UK this year.

Whether you are considering outsourcing your overdue accounts to a 3rd party collection agency, or employing a full-time credit controller, or indeed have one, or a team, in place, only business owners who prioritise collecting money owed will be the ones who are most likely to survive another 12 months of decreased cashflow in the UK’s commercial markets.

Time is crucial to all businesses and having an effective collections operation in your business will save you time. In this sense, time really is money. When you push collecting money owed from customers to the top of your weekly schedule, you will not only see a sizeable improvement in your bottom line, cashflow will be increased, bad debt reduced, DSO kept to a minimum, allowing your company to re-invest and increase marketing expenditure with freed-up cash from old sales and grow from within.

Our philosophy at Taurus Collections is to be firm but fair with your customers. If they are struggling, then collecting money owed from them may be drawn out, but treat
your customers with fairness and keep talking to them through the bad times because
if we all dig together in these deep recessionary times we can all come out the other side successful together.

How to collect business debt efficiently and without the hassle

Most of our clients ask us the same questions about how they can collect business debt quickly and what procedures they can put in place to prevent late payments in future. What is the most cost effective solution to collect business debt? Our answers are always the same. Your business needs a credit policy. Whether small, medium or large sized, every business must have set procedures in place when collecting money from their customers that you have privileged with payment terms.

Listed below are 4 key points on how a credit policy can assist your business to collect business debt through pre-emptive action:

1) Credit checking – a first action for all new business should be to credit check the customer. Credit reports are very cheaply priced and start from £4 for a basic assessment which is a small price to pay to give you a good piece of mind.

2) References – find out who they have done business with in the past. Did they pay on time? Contact their previous creditors and ask what their attitude was like and if they lived up to their promises when it came to payments.

3) Payment terms – consider lowering your payment terms if you are not 100% happy with a customer’s credit score. 7 or 14 days is acceptable and you may even want to take 50% upfront before any work is commenced to protect your financial position.

4) Follow up quickly – should a debtors terms be exceeded and you need to collect business debt, it is essential you follow up with slow payers immediately, as once they spot a weakness in your collection processes, some debtors will exploit it without much remorse.

To collect business debt with speed and efficiency you first have to put in place the correct policies and procedures to protect your business. Although you may be excited about a new business opportunity, if you are only wasting time further down the line trying to collect business debt, then you are effectively working for free. In that time you could have concentrated on trying to attract more worthy credit-trusted customers.

If you are struggling to collect business debt, please don’t hesitate to give us a call on 01332 565 350 for a no obligation assessment of how we can help your business.

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