Getting paid for the work you’ve completed can often be challenging, especially if payment to your business has not been made on-time. Managing debt collection is a common problem for many businesses and can greatly impact your cash flow. Having insufficient incoming cash flow impacts:
1) Payment for your employees.
2) The purchase of goods and necessities for your business operations.
3) Your ability to keep your business afloat.
Let’s take a look at how small businesses traditionally recover debt compared to new methods of debt collection.
The Australian Securities and Investment Commission (ASIC) recommend several steps to debt recovery:
Check the payment terms and conditions on your contract to determine debt recovery options.
Get in contact with your customer via phone, email or in person to give them a payment reminder, discuss payment date and negotiate a payment schedule for future.
It is important to have records of customer correspondence in case legal action is required.
If your customer does not respond to reminders, you are advised to send a letter of demand or ask your lawyer to draft one.
You may consider hiring a debt collector if your customer is not receptive to your reminders. However, you can let them know you plan to use a debt collector as they may prompt them to pay their debt first.
This is the last step to take if nothing else works.
Whilst many business still go through the traditional process of recovering debt, 365 Collect (debt collection software) offers a much simpler way to manage your debt collection and recovery, without making you want to pull your hair out.
So, how can debt collection software make this process easier? Debt collection software can efficiently automate the first five steps listed above and provides the information necessary to consider steps six and seven.
Once the software is set up, it will evaluate your database of accounts and send invoices before payment is due. This typically occurs three weeks prior to the due date. However, you can tailor the message and time between communications to suit your business. Debt collection software uses Artificial Intelligence to predict the best times of delivering these communication messages.
For example, you can:
And so on. This helps keep you and your customers accountable. The ability to customise messages and scheduling times allows you to create a tiered communication structure for different levels of payment requests and demands across multiple touchpoints, all from one platform.
Unlike the traditional debt collection process, debt collection software automatically saves and stores basic information to in-depth analysis reports. A digital record of your processes enables you to effectively manage your workload and prioritise actions off accounts which require immediate attention. It enables you to identify late payment trends, minimise overdue invoices and maximise cash flow in a much simpler and streamlined process.
Have any questions? Get in contact with one of our friendly team members today on 1800 560 690 or click here.