The expression – Cashflow Is King – exists for a reason. As a business, you are fully dependent on having enough cash to pay your current expenses. Your employees or landlord do not care if you have money arriving in a few months, they expect their wages or rent to be on time. That’s why late-paying clients can be an incredibly frustrating challenge. Not only does it tie up money you need to pay your bills, today, it can also be very time consuming.
A FSB’s report suggests that 50,000 fewer businesses would go under each year if their clients simply paid on time. In this blog we discuss how you can avoid late payments, and how to efficiently manage them when it does happen.
Managing client relationships to minimise late payments
For many companies the issue of late payments means much more than just issues with cash flow. Chasing late payments can be tough as it can be quite awkward to ask clients for money. There is often a worry that it will damage the relationship that you have with the client, and that it may affect future opportunities.
To avoid these uncomfortable situations, you need to make it as easy as possible for clients to make the payment. By reducing the time and effort they need to spend on it, you increase the likelihood of them paying on time. Creating customised invoicing for each of your clients will maximise the adherence to your payment terms.
The most efficient way of managing late payments is to try and avoid them. However, with 82% of SMEs having outstanding balance from their debtors, completely mitigating late payments is near impossible. It is therefore important to have a robust process to handle those instances efficiently, professionally and protecting client relationships.
Automate the Invoicing and Follow-Up Process
If you have late-paying clients, you’ll be very familiar with creating following up emails. This can be a time-consuming task, and not really something you want to add to the million other tasks you need to take care of. Instead of having to deal with those dreaded, awkward reminders, why not automate them?
Automating these tasks can save you a lot of headaches. It not only allows you to automatically send invoices, you can also prescheduled reminder emails on late payments. This allows you to free up a lot of time so that you can focus on tasks that bring real value to your business.
Avrium – Working Capital & Business Risk Management
The Avrium platform is an ‘all-in-one’ working capital and risk management monitoring solution. It provides clear insights into your clients’ financial health, highlighting any potential risks that can be controlled in advance. It includes a range of tools that will help you manage late payments and cashflow efficiently.
Our automated emails allow you to create customised email reminders and final demand letters. There are a range of templates that you can use, and the platform will automatically inform you when letters are due to be sent and you have full control over this process. By automating your collections process you no longer need to worry about who to chase and when. Avrium will provide insights on those who owe you money and provide you the tools to collect debt efficiently
Additionally, our invoice financing is able to show you which of your clients’ invoices are eligible for financing and how much working capital they can unlock from unpaid debts. Learn more about Avrium and how it can help you save time and efficiently manage late invoice payments in our brochure.