Debt Chasing – The Long Wait To Be Paid
Cash flow makes small businesses go round and without it, you have a huge challenge on your hands just to stay afloat. You probably have at some point had to face the issue of late payments – hopefully, it was not too serious, and the bill was settled within a week or two at the maximum. In all seriousness, however, things can get complicated when companies fail to pay on time, and the problem can have a knock on effect to you, your business payments and the growth of your business. The scary thing is that a huge 24% of small and medium-sized businesses say that they have had to wait more than six months for an invoice to be paid. Thanks to data collected in a recent Sensis Business Index survey, we can see that Australian businesses are, on the whole, failing to pay their invoices promptly. While six months is at the extreme end of the situation, 63% of businesses confirm that their invoices are paid late with 65 confirming that more than ¾ of their invoices are paid late. And at the top of the late paying list; manufacturing, construction and wholesale businesses. Late paying clients...
Read MoreChasing Debts – How To Issue A Letter Of Demand
The cash flow of any business is critical. Even if your business is making sales and operating successfully, if you do not have control over this cash flow and your debtors are not paying on time, you can face liquidity issues. Therefore, it is important to have a clear process for chasing debts and recovering outstanding amounts. One way of doing this is to issue a letter of demand. Recently I read a great article on the topic, titled: How to get paid: issuing a letter of demand, and these are some of the points the author made. There are three main methods you can undertake to recover what is owed to you and these are: Use a debt collection agency. They will charge a fee whether funds are recovered or not as well as a percentage of the actual amount that is recovered. Commence legal action using a solicitor. You can issue a letter or demand. The benefits of the letter of demand are that you manage the process yourself, it can save time and cost less than the first two options. The letter of demand is normally sent after you have already made several requests for payment...
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