Business Accounting Tips

Using Payment Reminders to Recoup Outstanding Invoices

Nobody likes chasing people for money. It’s one of the downsides to running a business. But if you have a good system of reminders in place, you can usually recoup the majority of your outstanding invoices without having to resort to legal action or a debt collection agency.

Preliminary steps

If certain steps are taken before allowing clients to purchase goods on credit, the chances of them defaulting on their payments are much less likely. These include:

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Keeping Track of Outstanding Payments from Clients

Knowing what you are owed and when you are likely to be paid is vital for making effective and informed business decisions. An efficient accounts receivable system is necessary to ensure this information is accurate and timely

Invoice

From the moment you send out your invoice for payment, your customer should be in no doubt as to your payment terms. That means providing a detailed invoice which includes:
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When Your Business Will Need Skip Tracing

Skip tracing is a critical and legitimate means of debt collection.  It is also so effective that some debt collection agencies offer a ‘no win, no fee’ skip tracing service to their clients.

So why would you need such a service? Basically, as the name suggests, you need skip tracing when a debtor has ‘skipped’; they have not paid you what they owe you and are now unable to be located. This could be because they have moved house, moved to another city or even to another country. Likely, the only way you will ever recover what they owe you is to call in a skip tracer to find them.

Skip tracing methods

Skip tracers use every method at their disposal to trace a debtor’s movements and discover their current whereabouts. First, they will interrogate all available databases and search engines (within the parameters of all applicable legislation/guidelines). They will also track other leads, which may include the debtor’s last-known residence and/or place of employment.

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Avoiding Unpaid Invoices in Your Business

Debt recovery is a sensitive issue that most business owners don’t enjoy taking part in, and yet it needs to be done effectively in order to maintain good cash flow. Customer non-payment for services rendered is an especially pressing issue for small businesses, so limiting the instances that invoices go unpaid should be a top priority. The following are just a few ways you can change how your accounts receivable operates when chasing up invoices so you can minimise unpaid invoices or, better yet, avoid them altogether.

Make it easy to pay

By making it as easy as possible for your customer to pay, you are far more likely to get paid on time. For example, you could accept credit card payments online throughout your website, making it extremely fast and convenient for people to pay you. Accept as many forms of payment as possible: credit cards, cheques and cash are standouts. When you send out invoices, make sure your collection policy is clear and outline how you will collect the money and any overdue payments.

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Protecting Your Business from Losses

As a business owner, you are probably aware that there are certain risks involved with doing business, and it’s vital to protect yourself from financial loss from elements both within and outside. Protecting yourself and your business from risks is often a delicate balancing act between what you need and what you can afford to do, but you should always do the maximum possible to avoid losing everything. Depending on the nature of your business, you may have unique risks, but the following are some general ways all businesses can be protected from unnecessary financial loss.

Get insured

Getting the appropriate insurance for your business is absolutely crucial if you want the basic amount of protection. There are many types of insurance relevant to businesses, such as asset protection, public liability, product liability, professional indemnity, revenue protection, key person protection and workers compensation insurance.

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