So far in 2015 I have had meetings with a variety of business owners in the Parramatta, Norwest and Castle Hill regions who have debts in excess of 180 days. These are business owners from all walks of life – builders, tradies, accountants, wholesalers, a large transport business and even a medical professional! Despite being in different industries, they are all universally concerned at their poor cash flow, but are not always aware of the importance of proactively monitoring and communicating with their debtors when chasing them for payment.
I highly recommend this be done by phone to speed up the payment process. However once an account hits 60 days overdue, a final written warning should be sent giving the debtor seven (7) days to pay or the account will be handed to a debt collection company. Remember the older the debt the more difficult it can be to collect as the debtor may have moved address, changed their phone numbers, or even become insolvent. So be proactive, remember to communicate with debtors and don’t be afraid to escalate if you feel you are getting nowhere. By becoming proactive you will see improved cash flow and increased profits.