A small web development business servicing 130 clients building, maintaining and hosting websites in NSW, VIC and QLD.
A fortnightly service where I liaise with the book keeper and directors re the debtors evolving status. Notes made on ‘Aged receivables’ printout. All debtors transactions are handled by myself removing the pressure from all others in this regard. The relationship with the client is between myself as the Debtors Manager and themselves, leaving the developers and sales people free to have a ‘positive good cop’ relationship with them.
I phone each debtor outside of 30 days payment due. All conversations are noted on MYOB in the Contact area so that in my absence all staff that may encounter debtor-clients, on the phone, have a clear picture of transaction and expectations. My aim is to have a relationship with them that walks the line between us supporting their business but helping them to stay in their integrity and not use us as a credit facility. I remind them that “we are in fact a small business and whilst we understand cash flow problems, unless they inform us as to what is happening we are quite simply in the dark. This makes us nervous! We too have families to feed…” yada yada - you get the drift.
I walk the line between understanding them and policing them. It is imperative that I keep them talking to me. This is my aim. To clearly and concisely train them to “do business with us on our terms”.
Invoices are re-emailed or re-posted depending on requirements. Wherever possible notes are hand written on posted reminders. Limitations are placed on debtors to help them maintain their payment on time eg: some clients are not allowed to have more work done until payment for outstanding is received. Explanations of these limitations are printed on invoice where appropriate.
My first call is a pleasant reminder, checking that they have in fact received the invoice, checking that we have all the correct contact information for them and that I am talking with the appropriate decision maker in this regard. My second is a request for a date of promised payment and so forth…(see ‘why won’t they pay’)
After each session I give the Directors an estimate of what I expect us to receive within the following week eg $4800 promised.
It normally takes three months to clean up, train and cull the debtors seeing 90 days at a zero balance and 60 days to under 1% …
