Debtors
When it comes to your invoice, it is worth considering:
- Does your invoice properly detail your credit terms?
- Do you require payment within a certain timeframe such as 7 or 14 days?
- Does your invoice include the following note so you can start to chase an outstanding payment immediately if it falls due:
TERMS
Please note that our terms are 14 days from this invoice.
By providing your customers details for both the means of payment and your payment address you are more likely to receive payment in a timely fashion.
Include your BSB, bank name and bank account details and, if appropriate, your BPAY information. Additionally, if securing timely payments have been difficult in the past, you may consider offering a discounted rate should payment be received within your designated payment period.
It is always best practice with debt recovery to adopt a proactive approach. While letters may be effective to show a paper trail of the work undertaken on your part for debt recovery purposes, it is more expedient if you pick up the phone and speak to the person concerned.
Do not pester clients, but ensure you are vigilant. Keep records of conversation or attempts to contact the debtor by letter, email or telephone.
If all else fails, consider engaging the services of a debt recovery agency. If further work is required by the debtor, either negotiate an upfront payment or secure instalment payments during the course of your services.
For more information to improve your cash flow talk to your Chartered Accountant.