- * Most legal and accounting firms have 14-day trading terms. And it’s not uncommon for Accounting firms to have an average of 65-90 debtor days of days and for Law firms to be 100 debtor days!
- * Research shows that just 38% of business invoices are paid on time.
- * Over $19 billion is locked away from Australian businesses every year due to late payments (Dun & Bradstreet).
- * Poor cash flow is responsible for 90% of SME failures.
HOW TO IMPROVE RESULTS:
- 1 Know your Days Sales Outstanding – DSO. This measures how quickly cash is being collected from debtors. This LinkedIn article explains how to do this.
- 2 Take a completely fresh look at the Debtors Ledger. This Blog Post explains how to categorise all accounts and how to deal with each category including wording to use in ‘reminders’.
- 3 Outsource some or all collection work. This page explains more.