Chasing your Debtors


Very often we find that business owners can be reluctant to chase their customers for non-payment of invoices.  This can be down to two things: perhaps there is no process in place to remind the business owner to chase the debt; and/ or they are nervous of appearing too pushy to their loyal customers.


First of all, it is essential that you have credit terms in place, and these have been spelt out clearly to your customers.  These terms will set out the maximum credit period i.e. how many days after the invoice, payment is due, or whether there is a fixed day or month to pay on.  You should also have a standard sales contract which should include terms like:


  • you own the goods until they are paid for, even after delivery to the customer
  • the customer must tell you within a set time if a delivery has not been received.


You could of course offer a discount for quick payment if that is feasible.


Generally if you have good habits for every day credit control, and you place this into a process, you will resolve many issues around credit control and managing your cashflow.  These include:


  • invoice promptly
  • call to check that goods have arrived and customers are happy. Use this call as both good PR and to confirm the payment details
  • use your cloud accounting system to regularly check your debtors – you can order them by value of debt as well as by date of invoice
  • have a regular slot each week to chase outstanding invoices. Always focus on the largest debts first, followed by the oldest. But also chase up early any customers you suspect may have problems paying. Don’t put it off. If you can’t do it yourself, get someone else on the case, but do not let the timescale slip. Make sure a note is made of the outcome of the conversation.


When chasing your debtors, remember that business owners are all in the same boat.  We all understand the importance of bringing in the cash, and so although it can feel an uncomfortable conversation, your customer will have had the same issues themselves with their customers.  Be polite and friendly, and look for a win-win result.


If you have any queries about credit control, please contact either Jackie or Andrew on 01625 524127.


Castletons Accountants

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