- March 31, 2021
- Posted by: Taurus Collections
- Category: Blog
For this month’s main article, we thought we would try something different. We asked a question on LinkedIn. When considering collecting commercial debt, what is the number 1 excuse you hear for people not paying on time? The results were surprising in some aspects (the fact that 2,388 read the poll, and were clearly interested in the results), but also the simplicity of the problem that over half of business owners said was the main reason for non-payment.
A solution so simple, that even us, having worked in the debt recovery business for 20+ years, was surprised by!
The number 1 reason for lack of payment when business owners were collecting commercial debt was that the customer “didn’t have a copy of the invoice”. Yes, you heard it right. Although it may be easy to say well this is clearly just an excuse, oppose to a reason for non-payment, but my argurment is this: why would you even give them the chance to not have a copy of an invoice?!
Its very simple to solve these problems, when we know what they are and that they are so common.
See the poll below for proof!
So we thought it would be a good idea to help you when collecting commercial debt, to have a debt collection habit that you have in your business to prevent the most popular “excuse” for non-payment ever being raised.
It’s a simple 3-step procedure that all businesses can use, and if followed, will instantly see an improvement in cashflow. FACT!
It all starts with the creation of a commercial debt: the invoice.
- Day 1: Raise invoice. Once raised, email it. Save it to your system. Schedule a follow-up call for 2 weeks to make sure they have received the copy. This is where the habit begins when collecting commercial debt. Remember your payment terms are 30 days, so you should be making a friendly call to make sure there are no problems with the invoice (and secretly that they have a copy – eradicating the no.1 excuse!)
- Day 14: Follow-up. Call them, email them, go and see them! Just make sure they have the invoice, and that everything is ok with it (i.e that they are going to pay it on 30 days.)
- Day 30: Request payment. There is nothing wrong with asking for payment of an invoice on the final day that it is due. Your customer will actually respect you for the fact that you are running a very efficient ship, and often will respond positively by making payment swiftly.
So that’s our simple collecting commercial debt habit that you should implement in your business right away. Teach your staff, educate yourself. But small changes in your business can have big impact in bringing a healthy cashflow.
If you are struggling to get to grips with cash collection in your business, now is more important than ever to tighten your procedures and collect all invoices over 30 days old. Do not leave it too late because many businesses will fail in 2021 as furlough ends and you need to make sure you are at the top of the pile to get paid. Call us on 01332 565 350 or email email@example.com to see how we can help you collect cash for your business survival.