Before founding CreditorWatch, an online credit-reporting bureau, Colin Porter, was a small business owner in the printing and publishing game and had firsthand knowledge of how detrimental slow paying customers can be to the cashflow of a business.
“Bad debts can make or break a small business,” says Porter, “you need to make sure you do your due diligence on new customers and ensure you keep a close eye on current customers.”
The current economic climate is causing a record number of companies to fall over, as a result Porter has put together the following tips for all business owners and accounts receivable managers.
- Invest in a credit report on new customers. This will allow you to see if they have any black marks against them, giving you a good indication of their credit worthiness.
- Start off with a manageable credit limit for new customers in the beginning and increase it overtime as necessary.
- Monitor your existing customers for important changes with CreditorWatch. You’ll receive email alerts to you when a customer gets into financial trouble or defaults with another company.
- The squeaky wheel gets the grease. It might sound like a cliché but it works! You should actively chase overdue invoices. A sale isn’t a sale until the money hits your bank account.
- Have a written and formal strategy for collecting payments and stick to it. Diarise invoices, statements and follow up calls. This will ensure you don’t miss chasing a payment and it will also train your customers to pay on time.
The importance of good credit management can’t be overstated. Here’s what one customer had to say – “The real time info we receive through the CreditorWatch system has provided us with the earliest possible warning of delinquency. I would recommend their services to all”. Fujifilm Australia Pty Ltd
For more tips on cash flow management and debtor monitoring visit www.creditorwatch.com.au, and take advantage of the 30 day free trial offer for BizCover customers.
