When your clients or customers are late on their payments, your bottom line profits are easily affected. In fact, these same late payments could be the reason why your company is not growing. It “silently kills” your ability to run efficiently and be productive. Sadly, Australian businesses are leading the pack among 80 countries as it has the highest debtor days ratio and takes the longest time to collect debts. This is especially hurtful to small-to-medium enterprises (SMEs) as profits or cash on hand may not be as readily available or efficient to sustain payments that are late from multiple clients at the same time. However, modern payment technology can decrease debtor days so your business thrives.
Before you can execute collecting debts from your customers, you have to take a good look at your own accountancy practices and determine if your process is efficient. Evaluate whether the measures you are taking are truly keeping your records up-to-date by tracking which customers are late and by what amounts. You can employ professionals to help you determine where your accountancy practices are lacking. However, it’s also ideal to make accountancy a standard by using modern payment technology that can be integrated into your business software. It makes keeping up with what’s due easier and helps to keep everything you need in one place.
When you only offer one payment method, you may make payment complicated for your clients. This causes delays in you receiving payments, and it leaves the control out of your hands. Rather than limiting the number of payment methods you offer, consider multiple payment method forms. Such as accepting direct debit payments online or offering payment processing solutions that accept credit cards. You can also employ innovative payment technology, such as in-video payments, that are embedded in a secure reminder email that will help encourage making a payment for a past due bill without having to go to another website.
If you send your invoices on time, you can encourage on-time payments. One easy way to get this done is to use modern technology that employs automated payments. You can use automated payments that uses direct debit payment solutionsor accepts credit cards online to expedite payments. You can even set up payment arrangements to take out on specific dates within a 30- to 45-day period so that you can ensure you have the funds you need before the following month closes out.
Rather than sending your invoices via post, opt for electronic delivery so you can get paid on time. Physical mail can easilyget lost or piled up in a stack of other documents. Instead, you can send your invoice via email so that the right person gets it on time. You can even implement a payment technology that automatically generates an email or text message reminder to make sure your customer doesn’t forget about the due date for the payment. Consider a cloud-based accounting payment solution that integrates into your existing software, such as the Xero integration with IntegraPay. It enables the PayNow feature in invoices and reconciles directly to the account so you can make collective payments easier.
To decrease debtor days you’ll need to have a strategy in place. You also want to make sure you’re using modern payment technology that makes accountancy a standard. It makes paying on contact convenient, and provides few obstacles by accepting a variety of payments. When you take these actions, you can help decrease debtor days and increase your profits.