Common themes for most businesses in NZ at the moment 11-04-2011

Part of the reason money is tight is that people are not paying their bills or are delaying payment. Too often the slow payment is after getting a very sharp price (sometimes at cost).

Collecting cash can be quite a tight rope walk where a business has to balance its desire to keeping working for a customer against the immediate need to pay its bills. Also, there are few people who truly enjoy the confrontation of asking for money.

Having had responsiblity for a number of debtors ledgers (ranging from a few dollars from a small business owner to millions from equipment suppliers) my top two tips are:

1. Give all customers a service call within a week of their bill being overdue. You are simply using the overdue bill to alert you to a potential problem with the job you did. If there is a problem get it fixed quickly.  Otherwise sound out when the money will arrive.
    
2. Ring the biggest debtors three days after the invoice goes out. Check everything is in order and that they have everything they need to pay the bill.

Whether these are pushy or helpful is all about how you frame it to your customer.  "Hi, just checking you were happy with the work we did" will win friends.  Angry or aggressive won't.

Of course ultimately collecting money relies on some really important things being done right before the person ever owes you money.  If you have not had good professional advice around your Terms Of Trade, credit approval and invoicing processes now would be a good time to do it.