Posted: 04 Dec, 2018
An out of terms invoice can be a real problem.
But there’s an alternative to the pain of writing them off or the expense of taking legal action: a debt recovery specialist who can obtain payment quickly, and cost effectively
A recent survey showed that a sixth of all SME invoices remains unpaid after 90 days, with half of those unsettled after six months.
Interrupted cashflow causes serious problems to operational efficiency. It can mean an increased overdraft, pay cuts for directors or paying suppliers late.
The threat it poses to smooth turnover and availability of working capital can even threaten the viability of a business full stop.
Fortunately, there are now more financing options for smaller enterprises than ever before. Indeed the latest data from the British Business Bank say that while net bank lending has remained flat, finance from non-bank sources has grown dramatically.
And part of this newer wave of solutions is the pragmatic, diplomatic debt collection expert who can recover payment for invoices that are out of terms.
At Breal Business Certainty, we do this by helping an SME put process into its procedures.
And that can mean an out of terms invoice gets paid quickly – often that very day.
This works in many cases because the simple introduction of a specialist, with extensive soft skills in persuasion and diplomacy, can encourage customers to do the right thing.
This can be successful with traditionally good payers, who may be experiencing their own cashflow problems. And it can work especially well with hardened non-payers – from customers laden with excuses to those who believe threatening words are normal business behaviour.
Using the option of an experienced debt collection agency means a financial controller need not go straight to the nuclear option of legal action. It is a middle ground that can be surprisingly quick and cost effective.
Moreover, it means less fuss, less worry and it can free up more time for an SME’s staff to focus on servicing more creditworthy and more valuable customers.
This can work well even on single invoices – enabling SMEs to bring in more cash to fuel working capital and drive growth.
The Breal Business Certainty method of getting results can also include an audit of existing processes and systems, to identify ways of reducing future instances of late payment.
For example, reviewing and monitoring payment patterns in the sales ledger can isolate issues before they become material problems. This can include spotting consistently late payers, and engagement with problem clients can sometimes give them the opportunity to share their own problems early on (something they may in fact welcome) – and this is all valuable in helping a business address its late payers.
For any business getting the run-around from a customer we can apply the specific blend of skills they need – backed up by decades of experience.
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