When you are selling and offering credit terms to your customers, it is essential to keep the cashflow moving. After all, your suppliers and staff want paying on time – as do you personally! This used to be very labour intensive. However, the automation of debt chasing and reminders, either on an individual invoice basis or on a monthly basis can ease the burden.
Offering different methods of payment can also speed up cashflow – “pay now” buttons on invoices is one method whereby customers can click a button and pay by credit card or bank transfer, and direct debit puts you in control of when you get paid. Direct debit can also be fully automated so that invoices are collected automatically on the due date.
Debtor days is the average number of days required for a company to receive payments from its customers. We can tell you the number of debtor days in your business and illustrate the effect of a reduction in those debtor days on the cash available in your business, as well as help you implement debt reduction strategies.
