Recession-proof your receivables

Almost two-thirds of small businesses in the UK experienced late or frozen payments as a result of the Covid-19 outbreak, a report by the Federation of Small Businesses has claimed. 

It’s absolutely critical to review your internal processes to help recession proof your business’ receivables. These are a few suggestions:

Raising new invoices

Get them out ASAP and ensure you have clear payment terms agreed in advance. Is there anything you can be doing to collect invoice information more efficiently or accelerate this process? Now is the time to do it.

Consider using credit limits and decide in what situations, and at what levels you’ll use these. You can set these within most accounting software providers.

Adapting internal communication

Be rigorous about your invoice and customer records, keeping track of any agreed expected payment dates and payment plans.

Share a Progress, Problems, Plan (PPP) report with your team. What approach was used when debts were paid fully or partially? Keep a log of your successes to find out what is working and what is not.

Reduce friction to pay

Make it as easy as possible for your customers to pay you. Consider one-click payment options or online payments through a merchant service provider such as Stripe or GoCardless. 

For customers experiencing serious cashflow issues themselves, consider offering extended payment terms or instalment payment plans.

You could also consider using an automated credit control system such as Chaser. On average this can save over 7 hours on credit control every week and boost cashflow.

So don’t write off your debts, create a game plan and get chasing them now!

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