Firstly, you will need to
* KNOW what your Debtors Day ratio is which measures how quickly cash is being collected from debtors. (If you don’t know, but DO know what your annual fees are, click HERE or on the table above.)
* REDUCE that ratio. (Businesses with lower debtor days tend to do better because their cash flow is stronger.)
THREE WAYS TO REDUCE DEBTOR DAYS.
ONE: 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’.
TWO: Outsource some or all collection work. This small information site outlines the benefits, results and includes a comprehensive FAQ section.
THREE: Offer debtors the ability to “pay off” their invoice/s in monthly instalments. If you are an accounting or legal firm, consider FeeSynergy. (They provide a professional fee funding facility that pays 100% of a clients fee to the creditor firm NOW and allows the client to pay the balance monthly at NO COST to the creditor firm! This is their website.