- March 24, 2022
- Posted by: Taurus Collections
- Category: Blog
An aged debtors/ receivables report lists down all the unpaid sales invoices of your business. It displays the overall amount of money each customer owes you on a given date. Hence, this debtor report lists down the total amount of your monthly debts by giving you a breakdown for each customer. This further allows you to drill down and see the invoice number, the amount due, and the specific date for which the amount is due. It can also demonstrate any of the invoices that are overdue and thus stand in a queue with your invoice payment terms and call for a reliable debt collecting agency to chase them.
Why is aged debt significant?
An aged debt is the evaluation of the total money that your customers owe to your business. Besides, it also shows the exact time your customers will take to pay, on average, by measuring the ‘debtor days’. It works as a critical key performance indicator (KPI) for any business cash flow. While bringing in a significant amount of sales is a key to good cash flow, you wouldn’t want customers that show extended inconsistency in making payments. Hence, keeping aged debt under control and debtor days low enables you to improve your financial health.
However, if your debtors pay on time and your liabilities are maintained at a minimum, it signals a good financial position for your business in the future.
How does managing debt help your business’s cash flow?
Timely payments allow you to achieve positive cash flow. Managing cash flow lets you ensure that the cash flowing into your business is greater than the money flowing out. Hence, well-structured debt management increases the speed and volume of money coming into the company. However, having a robust credit control function in your business enables you to achieve this by verifying your aged debts and tracking down outstanding payments while proactively chasing customers for payments.
What is an effective practice for tracking debtors?
It is essential to have a historical, real-time, and futuristic view of your debtors to manage your aged debts effectively. Achieving an intelligent cash flow, debtor tracking tool, or taking the assistance of a reliable debt collecting agency will enable you to get the most precise overview of your past, current, and future debts.
While the volatile nature of your customer’s payment habits makes you unlikely to get paid on time, focusing on your aged debtors by relying on the information from your finance tools will enable you to keep your debt level to the minimum.
Taurus Collections (UK) Ltd is your one-stop destination if you need a reliable debt collection agency for the hassle-free collection of dues for your business. We strive to follow a simple, straight-talking approach to assist our clients regarding debt recovery services. We aim to offer optimum customer satisfaction and deal with your debtors. Our services include pre-legal visits, outsourced credit control, no win no fee debt recovery, UK & international credit checking, and business finance. Use our Late Payment Calculator to determine and confirm your credit amounts. Call us at 0800 069 8777 or 01332 565 350 (Derby) or send your queries at firstname.lastname@example.org for more information. Stay tuned on Facebook, Instagram, and Twitter.