Most business owners have issues with customers owing them money. This can be a real burden on the cash flow of your business and prevent you from reaching your growth goals.

As a small business owner, it’s vital that you understand how debtors affect your daily operations and what you can do to reduce your debtors and improve your cashflow.

Here are a few things you can do to help encourage customers to pay early and increase your cash flow:


The first step is to check your invoicing process and systems from start to finish. The whole process has to be simple for you and your customers.

Can the process be improved?

Are there any issues with the process that could see the invoice being overlooked by your clients?

To help you be paid on time, invoices need to be sent on a timely basis so they remain relevant to the client.

If possible, your system should allow you to get a confirmation that the invoice has been received and read by the customer.

A payment reminder is automatically generated and sent to the customer several days before payment is due, and if it remains unpaid, then invoice reminders are sent and followed up accordingly.

The above process can be automated as much or as little as you want through the use of cloud based software products like as Xero.

Credit Checks

Obviously, immediate payment is still the best way of doing business. However, if we are going to provide credit to a customer, then you should be performing a credit check on the customer prior to providing any goods or services.

Payment methods

Providing flexible payment methods to customers can be a good way of doing business and ensuring you get paid on time.

However, there can be charges attached to using some of these payment methods, so do your research before committing to such a plan.

The follow-up

Keep talking to your debtors, make file notes for every touch point and show a certain level of empathy towards the customer.

At the end of the day, you are not a bank for your customers or clients and people usually understand thinned to pay on time.

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