Supplied by Manoli Aerakis – Malloch McClean Tasman
Did you know that even
though you haven’t collected your debtors, you still have to pay tax on them?
This is because you
pay tax on your sales figures irrespective as to whether or not you have
collected the cash. So use these ideas to collect your debtors quicker:
Agree your
payment terms at the time of sale
Get terms
of trade signed off in writing before you start the job
Include a
guarantee in the payment terms
Invoice as
quickly as you can
Ask for a
deposit
Change
your payment terms to 7 days or ‘on delivery’
Send
statements with only 2 columns – current and OVERDUE
Follow up
the day after the due date
Put
someone other than the business owner in charge of collection – owners are
usually too soft!
Document
what your customers have promised in terms of payment and hold them to it
Use a debt
collector sooner rather than later – the longer you leave it the harder the
debt will be to collect
Stop
credit for customers who are late on payment
How many of these
ideas have you adopted in your business? How many are you actually
applying?