Knowledge

Smart Strategy for Better Cash Flow for SMEs

Sander Kamstra May 21, 2020

Late paid invoices heavily impact your cash flow. Strategic and automated debtor management is an efficient tool to handle this. It is accessible for every organisation, including SMEs. In fact, automated management results in 30% faster payments while requiring 50% less time. Read here how to implement a smart debtor management strategy for your SME.

Strategic Debtor Management is Possible for You (and in Less Time)

Strategic debtor management also provides SMEs with time savings, faster payments, and more consistent management. However, it is more than just sending an invoice and following up. It means focusing on management, tackling it rigorously, rather than doing it alongside regular tasks. This focus, combined with the use of smart technology, gives you more time and better payments.

The Key Benefits of Strategic Debtor Management for SMEs

30% faster payment through improved payment behaviour

With smart debtor management, you improve your customers' payment behaviour. You achieve this by staying on top of things, forming an active policy, and adhering to it. Show your customers that you consider invoices important. You can easily track invoices through technology, payment reminders are sent automatically, and the communication surrounding them is directly stored.
Een betere cashflow door snellere betalingen

Sneller payments help prevent cash flow problems. As an SME, this means you have less need for (pre)financing, whether it's invoice financing or a business loan. A better cash flow also means you have more room for investments or to financially enable growth.
The customer relationship first

If an invoice remains unpaid, it is often followed by an amicable collection process. This is often done through an (expensive) collection agency that does everything possible to secure the payment, even if it harms the customer relationship. These impersonal collection processes are no longer necessary with strategic debtor management. With a good policy and appropriate software, you ensure proper file management and can initiate the collection process yourself.

How to Approach Strategic Debtor Management as an SME?

This approach mainly involves: no grand plans, but policies with concrete actions.

Ensure a More Efficient Administration

Send digital invoices or even e-invoices. An efficient administration records matters structurally, preventing errors and misunderstandings.

Appoint a Responsible Person in the Organisation

With smart technology for debtor management, you spend at least 50% less time on management. However, management does require focus. Appoint a responsible person and give them time to carry out the tasks.

Consistently Record Steps in the Invoice Process:

What is the payment term?
When do you send a reminder, and when subsequent reminders?
When do you stop or pause the reminder process?
When is the final reminder?
What do you want to do with the collection process?
When do you offer payment arrangements?

Use Technology to Automate Your Debtor Management

It takes work off your hands, allowing you and your employees to do more. Such as giving attention to customers who need it. Or to identify payment problems and see where you can improve the process and communication. With automated debtor management, you can offer multiple payment options and engage in dialogue with your customer per invoice. You remain friendly and personal in contact with your debtors, with all the benefits that entails.