Collect your debtors fast
January 1, 2022
Collect your debtors fast
Did you know that you still have to pay tax on your debtors, even if you haven't collected them?
This is because you pay tax on your sales figures, whether you have collected the cash or not.
So, how do you collect your debtors faster?
- Agree your payment terms at the time of sale.
- Ensure your customer signs your Terms of Trade before you start the job.
- Include a guarantee in your payment terms.
- Invoice as quickly as you can.
- Ask for a deposit prior to starting the job.
- Change your payment terms to within 7 days of invoice or on delivery.
- Send statements with only two columns - current and OVERDUE.
- Follow up the day after the due date.
- Have someone other than the owner be responsible for collection of debtors (owners are usually too soft!.)
- Document any changes to your standard payment terms in writing.
- Use a debt collector sooner rather than later - the longer you leave it, the harder it is to collect.
- Don't provide credit to customers who have been late payers in the past, and don't offer more credit to customers with outstanding payments.
Don't procrastinate on your debtors. Establish clear payment terms and ensure you stick to them.
It's the squeaky wheel that gets the oil". - Anon
Need help developing your Debtor Management Policy? We can help!
This Christmas, we've put together another festive eBook for you to enjoy! This year, we're focusing on embracing the holiday spirit while gearing up for the year ahead. It's the perfect time to unwind, reflect, and recharge—whether you're with family, friends, or taking some quiet time for yourself. Inside, you'll find fresh ideas to liven up your holiday gatherings and meaningful ways to spend time together while creating more time, mental clarity, and financial freedom. And while we're all about those cozy Christmas treats, we've swapped out the usual gingerbread and fudge for a brand-new, mouthwatering holiday delight. Happy holidays and here's to a joyful, restful season!
Cutting costs can be a key way to boost your profits. But how does managing your expenditure increase profitability? We outline the benefits of proactive cost-saving measures.
The Federal Budget has been released, and we've outlined the key elements that you need to know.
