Do you have slow paying clients?
CreditorWatch helps over 50,000 businesses combat the effects of slow paying clients, from ASX-listed corporates to sole traders and small businesses. And it’s small business that usually suffer from late payments the most.
According to a study by business software company Xero, small and medium enterprises (SMEs) are losing up to $7 billion a year from slow paying bigger businesses. Late payments cause a ripple effect for small companies, making it harder for them to maintain and hire staff, grow their business and remain profitable in a troubling economy.
You can implement these tips today to stay ahead of slow paying clients and safeguard your business’ future.
Three tips to prevent late payments
Do your due diligence
Staying ahead of the problem is the best way to solve it, and this means investing in a robust credit risk management process. Don’t take a debtor’s word for it – investigate their ability to pay on time by completing a credit check.
Be upfront about expectations
When on-boarding new customers, make your payment terms and policies clear from the beginning. Make a firm but fair impression and your clients are more likely to take you seriously.
Make sure your agreements and credit policies are in writing and determine when you’ll take further action against late debtors, like if they’re 90 or more days overdue.
Pay attention to payment patterns
We’re all creatures of habit, and your debtors are no different. If your customers are paying you consistently late, jump on the phone and explain you’re reducing your payment terms until things get back on track.
Deteriorating payment behaviour could be a sign that the company is in financial difficulty, so it’s vital to pay close attention and secure your cash flow. Check out the retail industry’s payment data collated from our Q4 2019 Small Business Risk Review.
How CreditorWatch can help
Think of CreditorWatch as your guardian angel, helping you detect and deter slow paying clients and build your business without financial burdens.
With CreditorWatch, you can perform a credit check on any business in Australia, be alerted to adverse behaviour from your debtors, and identify the biggest risks to your business – all from one intuitive interface.
If you’re struggling from getting paid on time (or at all), access CreditorWatch’s debt collection tools to get your funds faster. Use our formal letter templates, like payment reminder and overdue notices, to prompt your customers to pay up.
When all else fails, register a payment default against the slow paying client. A payment default can stay on a credit report for five years and serves as a warning sign to other businesses considering doing business with them.
CreditorWatch’s suite of credit risk management tools are intuitive enough to used by anyone – not just credit managers or controllers with extensive industry experience. Find out how easy it is to prevent slow paying clients with a free seven-day trial now.