Most businesses are not managing their debtors effectively and efficiently. Many don’t even realise it because they’re doing what they’ve always done. It’s not great, but it gets the job done most of the time, well at least until something changes, like a person leaving, COVID or a period of rapid growth.
The good news is that we’ve learned how to make debtor management easy, time-efficient and highly effective for any business. But before we show you how, let’s take a look at the common problems that businesses face when it comes to managing debtors.
Is your process actually causing late payment?
Do you have a well-defined debtor management process that’s easy to follow each month? Does it guide your steps at every stage, from sending statements, to making calls, to moving customers to stop credit and debt collection?
Every step in your process should be decided in advance, then codified into your debtor management software so it’s easy to follow.
If you’re not sure what a great process looks like, download this free guide.
You’ll know you’ve got your process right when anytime you do debtor management it feels logical and effective. You’re simply following the next predefined step in the process for each overdue account, there’s less pondering about what to do next.
Without a good process debtor management is guaranteed to be more painful than it should be resulting in:
- Greater decision fatigue,
- Higher task-switching costs,
- And more meetings to make decisions.
These avoidable delays in your process are one reason why your customers are paying you slower than they could be, you’re giving them more rope than you should!
Do you have enough time to manage debtors?
How about your time? Are you spending too much time managing debtors? Or perhaps you’re not spending enough time because other priorities keep getting in the way.
Do you enjoy chasing overdue accounts?
It’s a serious question, but it’s usually met with rolling eyes – because who in the history of debits and credits loved doing this job? Only a rare few.
We talk to ‘debtor management haters’ all the time. To sum it up, people hate doing debtor management for five main reasons:
- They hate it because they’re asked to do the job as an ‘extra task’ on top of their regular work. It’s not their skill or they don’t have time.
- They hate it because they lack the time to do a good enough job of it. You simply can’t move the needle with debtors if you can’t spend enough time.
- They hate it because they lack the tools to do a great job within the hours they have available.
- They hate it because they’re not given appropriate training and they have to make up their own method using the wrong tools for the job, like spreadsheets.
- They hate it because it’s plain wrong. “Customers should just pay on time” is a sentiment we hear often.
If you’re hating debtor management, there is light at the end of the tunnel.
In fact, there are several ways to make the job easier, faster and more effective.
Here are a few ways for starters:
- Ditch your spreadsheet and manual emails. Try using specialist debtor management software instead. Start with a free 14-day trial >
- Get some training. Register for our online training which will teach you how to manage debtors efficiently and with greater confidence.
- Outsource it. Hire one of our NZ-based AR Specialists to do the job on your behalf. Read how Ark Advance did exactly that.
About CreditorWatch Collect: Over 150,000 calls and $2 billion paid faster
For the past nine years, CreditorWatch Collect has been solving debtors for businesses around the world. We were the first debt management solution to launch automated invoice reminders for Xero and four years ago created a world-first where phone calls (made by real people) could be automated in a debt management workflow, just like email reminders.