Late or non-payment of invoices by customers unfortunately occurs frequently. Regardless of the cause, it can have significant financial consequences for your business. Prevent these issues by investing in the entire process surrounding debtor management.
The impact on your business
To make your business financially successful, good debtor management is indispensable. You may receive many orders from customers, but if they do not pay on time, it negatively affects your financial situation. Good debtor management helps you avoid cash flow problems and increase your company’s working capital.
Debtor management process in practice
Debtor management encompasses all activities you undertake concerning your debtors. Everything to ensure that your invoices are paid in full and on time. This includes: sending invoices and payment reminders, telephone contact with customers, and initiating collection procedures.
Unfortunately, a successful debtor management process is not a given and can be challenging to manage. A structured way of working helps with this.
Debtor management process step by step
A fixed procedure with a payment term of 14 days might look like this:
Step 1. Invoice dispatch
Send the invoice immediately after completing the assignment or service. The longer you wait, the later the payment will be received. Clearly state the payment term on your invoice.
Step 2. First reminder
If your customer has not yet paid the invoice, send the first reminder 2 days after the due date.
Step 3: Second reminder
Send a second reminder if no payment has been made 18 days after the due date.
Step 4: Final notice/WIK letter
The last chance for the customer to meet the payment obligation is 34 days after the due date.
Step 5: Start collection procedure: 50 days after due date
After two reminders and a final notice, you hand it over and a collection procedure is initiated.
Automating the debtor management process
Manually keeping track of this process takes a lot of time and energy. By automating it, you remind customers of unpaid invoices in a structured way.
The benefits
- Significant work savings
- Full control over the process
- Improvement of your cash flow
- Track the status of all invoices
Request the free demo
Payt offers various solutions to make software work for you. Want to discover the possibilities for your business? Request the free personal demo now!
