How to avoid debtors?
Updated: May 4
Bad debtors can have a devastating impact on small businesses keeping afloat and what cash-flow a business has available. Identifying and spotting the trends that cause bad debts in your business and why you are vulnerable can help you avoid bad debts in the future.
Read our 5 handy tips to help ensure you don’t have to deal with bad debtors in the future.
Credit Reporting and Financial Monitoring
Where possible obtaining a credit check on potential clients can help raise any concerns before doing business with them. If the credit check shows a red flag this can be a strong indication of the likelihood the client will be able to make payment. By continuing with financial monitoring of your client’s financial situation every six months, will give your business extra protection to your cash flow.
Tailored Terms & Conditions and Payment Terms
We suggest you add within your terms and conditions added protection to protect your rights and limit your liabilities. By including payment terms makes it clear between you and the debtors to know how much is owed and how and when it will be paid.
Constant and Clear Communication
Keeping in constant communication with your client can be key to making sure they pay you in time. If they still haven’t paid after receiving an invoice by giving them a courtesy call can help point out payment is now due.
Invoice on Time
This is so important, by sending an invoice late can cause confusion, appear unprofessional and cause excuses for late or nonpayment.
Show you mean business and refer the debt to Westbury Collections
If a client is still ignoring to pay, you should issue a debt recovery agency to recover the debt owed. You have up to 6 years to refer a debt to a debt collection agency. We are then able to act as a middleman and recover the debt for you and advise you on the best course of action.
If you would like to refer a debt to Westbury Collections, please complete the refer the debt form.