Let’s face it one of the first things you think of when you go into business is not who is going to follow up on late payers and manage the list of debtors. The reality is that this role is largely one of the most important and usually ends up being the last thing on the list and mostly ends up on the list because there is a problem.
It may not be so bad if you only have a few companies that are late payers, but I know in my business that is not the case.
Bizarrely it is not our debt collection client but the work we do on behalf of other debt collectors that are the late payers. We have a dedicated person whose role is to follow up on these clients. It is tedious that we have to have a dedicated person doing this role, why can’t our clients just pay on time, one thing I do know is that without that person our cash flow would severely suffer.
We all know how important cash flow is, my dear dad used to always say to me ‘Nichola cash flow is king’.
It makes me sad when we get clients who are suffering from cash flow issues, which is compounded by high volume clients paying late. The problem is we get too emotionally involved when it comes to asking our big clients for the money, we get scared we will lose them as a client.
The following up on money should be done by someone who is not emotionally connected to the outcome and all they are there to do is get the money back.
If you don't have a person in your business dedicated to chasing up aged debtors, what steps can you take today to fill that role? And if you do have such a role already, do they have clear guidelines on when and how to follow up effectively with clients to protect your cash flow?
We'll cover those issues in upcoming emails.