Credit Collections Secrets: How To Improve Your Company Cashflow Using These 5 Techniques

A company’s cashflow is the centre-piece of any business.  We all know that without it, and a failure to apply strict credit collections procedures, a company will inevitably fail to trade successfully, and usually eventually die.

However it is often very easy to state this line of warning, but what about the mechanics of successful credit collections.  What can you do today that will instantly improve you company cashflow?  How can you communicate with your customers quickly and simply to make credit collections a more effective exercise?

We have decided to put together a checklist to create the perfect invoice.  Remember an invoice is often the very first document your customer (or at least their Finance Dept) sees from you, so it should be clear, concise and a “notice to pay” if you want to be successful in credit collections:

1)      Bank details – Include bank details on your invoice, clearly marked, in bold, in a box, underlined etc. highlighted as much as possible.  This is a common cause of non-payment for some of our clients, they simply did not mark their bank details clear enough, or even at all on the invoice!

2)      Contact details – Include contact details on the invoice in case of query.  Again mark clearly and in bold at the bottom, you will need an email address, telephone and fax number so any issues can be quickly resolved and your credit collections not delayed.

3)      Service or product description – be accurate.  Detail exactly the product or service you have provided.  80% of queries revolve around not knowing what work was carried out, or a rate dispute, so make it clear how you have come to your invoice total.

4)      Warn of late payment consequences – Include a 1-line notice at the bottom, stating along the lines “Should you fail to pay in line with our 30 day terms, we reserve the right to charge Late Payment Charges, Statutory Interest at the rate of 8.5% and costs for recovery by a 3rd party debt collection agency”.  This will make it clear to your customer that you have a plan, which you are serious about carrying out, if they fail to pay on time.

5)      Ensure sending receipt – another top excuse for late payment can be that the customer hasn’t received their invoice.  Always, always, always email your invoices (unless your customer expressly states otherwise).  Emailing ensures receipt and you have digital evidence (time and dated) of sending in your sent items, so your credit collections won’t suffer unnecessarily.

So above are a few pointers when you are carrying out credit collections in your business, you must remember the detail is important when constructing your invoices.

This is something you can start implementing with your finance team TODAY, so don’t hang around and start improving your cashflow and let’s see more businesses prosper in the final quarter of 2015.

If you need to talk about company cashflow issues, with regards to debt collection, invoice financing or Insolvency, please don’t hesitate to contact us on FREEPHONE 0800 160 1681 or email enquiries@tauruscollections.com



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