Hi, you don’t know me but can I borrow £34,000? I promise to pay you back!

18 February 2016

Hi, you don’t know me but can I borrow £34,000? I promise to pay you back!

While your customers aren’t quite as direct, many are probably trying to use you as a bank and this statement is pretty true. In a recent study, it was reported that SMEs in the UK were owed a staggering £55 billion, more than was actually loaned by the British banks to SMEs in the past year!

What does this mean to small business? It means that you’re spending an average of 42 days a year chasing unpaid invoices, rather than running your business. I don’t know about you, but I’m pretty sure I have better things to do like finally starting my ‘Learn Zulu in 10 easy audio tapes’ rather than remind people they need to actually pay an invoice.

No one gets into business to chase overdue invoices (well, aside from Debtze) and inaction only compounds the problem. It's like that £20 your mate owes you, you want him to pay you back but you don’t want to have to ask for it. What happens? Nada.

Small businesses shouldn’t be afraid to seek help when it comes to late payers, as the consequences of not managing your cash flow is probably keeping you up at night as it is.

Tips for not being a bank:

  • Stop with the paper / Excel combo, and start using an online accounting package that offers e-invoicing. We use and recommend the team at Xero simply for their awesome support and fantastic product.
  • Clearly state payment due dates AND the methods to pay. Customers are like children, you need to make it easy or they get distracted.
  • Be the squeaky wheel, over 90% of overdue invoices are down to laziness. It’s an oldie, but a goodie.
  • Follow a proven, multi-channel collections strategy that results in your invoice being paid before anyone else. Debtze helps with this.

Lots of love,
Debtze

blog comments powered by Disqus