As a business owner, you should be prepared to deal with clients who have outstanding debts. In the present scenario, a large number of business owners are experiencing cash flow problems and according to statistics, if the debt is overdue by a year, then the chances of it being paid is only 24% whereas, if the debt is overdue by only a month, then the chances of it getting paid increases by 93.8%.

Businesses require a sufficient debt collection recovery process for collecting debts quickly and effectively and improving cash flow management.

In this post, we will provide five useful tips …

The debt recovery process can be the most frustrating aspect of running a business. It is maddening that you provide your service or product to a business organisation and not get paid. This happens too often in the B2B sector because the vendor didn’t implement some simple procedures. With just a few adjustments to the way you handle your accounts and invoicing, you can avoid bad debt, increase cash flow, and progress in your business venture.

Here are the top five ways you can avoid bad debt.

 
1 Tighter Debt Control
It is your first line of defense against managing debt and …

One of the most challenging parts of a business is dealing with debt. Whether it is money you owe or are owed, many people prefer to avoid the topic of debt. Nevertheless, if you plan to keep your business afloat, you need to be familiar with all the debt recovery options available to you. One of the most effective methods of debt recovery, Australia is the use of Garnishee Orders.

 
What is a Garnishee Order?
A garnishee order is a legal avenue pursued by a creditor who has exhausted all other credible methods of recovering a debt. Garnishees orders bypass the debtor …

Getting paid for the service, you have completed, or products sold can sometimes be a daunting task. To completely avoid this kind of situation in your business, you would have to ask for payment upfront or before you execute the service. Be that as it may, there are some ways you can handle a client that won’t pay.

The following tips will help you in your efforts towards getting payment from your clients.

Send a Reminder

Sometimes, clients may honestly forget to make a payment. Give them the benefit of the doubt; maybe they don’t remember they owe you money or they …

Unfortunately, one of the most common dilemmas faced by many business owners is delayed payments. When you own a business, there may be times when you will have to chase up unpaid invoices with clients. While it’s not easy, it is part of owning a business and is something that must be dealt with appropriately.

Those uncollected payments can cause a negative impact, including affecting the growth of your business and disrupting your cash flow. There have been a growing number of SME’s (Small and medium-sized enterprises) in Australia that has struggled to collect payments from clients in recent years, with …

Cash flow management is an important aspect of any business as it enables a business owner to pay for his expenses in good time. Any business owner would readily prefer to receive cash for the services they have rendered sooner than later. This implies reducing the receivables days (the time, on average, that a business’ customers to pay for services/goods they have received on credit) and lengthening the payables days to improve the cash flow.

This is how to keep your business afloat. It follows that you need to ensure that your debtors are always paying you in good time. …

At its most basic form, running a business is essentially about the bottom line: – the profit. Does the sales revenue exceed the costs to achieve said profit? In making a sufficient sales revenue, a business owner can pay off his expenses and thus maintain the business as a going concern.

However, with the introduction of credit as a means of improving business flexibility, a complication now occurs in managing business cash flow. A business owner needs to be able to time the business inflows to match the business’ outflows (expenses). Of course, credit management offers businesses the option of obtaining …

Receiving money from clients for goods and/or services provided from your hard developed business is undoubtedly one of the best feelings in the world. As the topic rightly suggest prevention is always better than cure. It is always wise to take precaution before you get loads and loads of debts above your shoulders. No matter your situation, you want to have planning in place to ensure that your goods and/or services you provided gets money that it belongs.

As you prepare for long-term success, here are factors you need to know about receiving payments on time for your business:

Suitably covered Terms …

Good debt collection techniques start even before the debt is issued.

Some businesses can afford to avoid debt. They can apply a ‘no release until payment’ policy, enforcing strict cash-on-delivery. This isn’t always the case though. Many businesses run on the 90-day-payment rule. Unfortunately, once your 90 days stretch to 180 days, it’s far more difficult to recover, so before you sign that three-month line, check your client’s credit status and financial background. Run due diligence and keep clear records.
Have it all on paper
Once you’re satisfied that your client can pay, draft distinct legal documents (have your lawyers approve them). They …

When someone offers you goods on credit, you’ll probably agree. That’s why many credit card companies offer their unsolicited cards by mail. They know giving you the card will drive you to spend. That way, they can make money via interest charges. Many people who receive unplanned credit will use it up without thinking about repayment. And once the unexpectedly high bill arrives, they have to spread their repayments, accruing interest, and allowing the card company to recoup profits.

From a business perspective waiting for late payments affects your cash flow, among other things.

 
Why (not) credit?
If your outstanding payments are …