One of the biggest challenges facing businesses in this economic climate is collecting outstanding debts. It is especially incumbent on small business who often do not have the financial backing to sustain late payers or worse, non-payers.

  1. Have a system in place- which you follow.
  2. Invoice regularly, as close to doing the work/supplying the goods as possible.
  3. Do not continue work if bills are adding up, there must be a limit.
  4. The longer debt remains unpaid the harder it is to collect, it could also prescribe (lapse) if left too long.
  5. Keep a good record: messy accounts add massive issues, especially as time goes on and they become harder to reconcile.
  6. Make sure invoices are being received. I did work for a company that had a large outstanding book, turned out that for over half of it they were sending invoices to the wrong addresses.
  7. Make sure invoices are clear and contain your banking details.
  8. Email is best these days- easy to resend, always accessible, and you have a record.
  9. Have terms and conditions (or an agreement with your client).
  10. Identify the client: make sure you have the address and registration details of entities (or for persons, a proof of identity);
  11. Deposits and prepayment.
  12. Credit check: especially for larger amounts such as rentals where there could be a history of non-payment.
  13. Follow up on payments.
  14. Send a legal letter if you are having issues collecting.

Leave a Comment

Your email address will not be published. Required fields are marked *