You perform successful debtor management if the debtor item is as low as possible in relation to your turnover. In other words: if the invoices are paid on time and in full. Unfortunately, this does not happen automatically and to achieve this you need to invest a lot of time and energy.
Defaults are more common than you think
For example, non-payment of invoices is more common than you think. This is not always due to financial problems or bad intentions. For example, a late or no payment can also be caused by poor administration or business disputes. Default is one of the biggest reasons why companies go bankrupt. It is therefore very important that you do everything you can to prevent this.
Avoid payment default
You can arrange a number of things in advance for the successful conduct of your debtor management. For example, you can do a credit check before entering into an agreement with a company or person. This allows you to investigate the risk of default before you decide to do business with a company or person. In addition, you must make clear agreements about the payment term and adhere to it. For example, have you agreed on a payment term of 14 days? Then you cannot check whether the payment has actually been made after a month.
Work process Accounts receivable management
To properly carry out your debtor management, it is best to use a fixed workflow. Below we show what such a debtor management process can look like. We use a payment term of 14 days.
- Payment reminder: 15 days after invoice date
- Telephone reminder: 21 days after invoice date
- Reminder: 30 days after invoice date
- Last call attempt: 44 days after the invoice date
Still have not received payment after the last telephone attempt? Then you can choose to hand over the claim to, for example, a collection agency.
Automate debtor management
Debitan offers various software packages with which you can automate the management of your debtors. This means that your debtors are automatically followed up after the invoice has been sent.
You can choose from different packages. You can also contact Debitan for additional modules with which we can tailor your debtor administration completely. More information? Please contact us. You also have the choice to keep your administration under your own management or to outsource it entirely.
Outsource or do it yourself?
Whether you should outsource your debtor administration or do it yourself depends on several factors. It depends, among other things, on the amount of debtors you have.
In general, small businesses can do it in-house. It is better for medium-sized and large companies to outsource it. It is better for medium-sized and large companies to outsource it.