Should you give up, or should you just keep chasing payments?

Although the economy is improving for UK businesses, many??SMEs??experience slow or late payment from their customers.

When it comes to the financial management of a growing company, the lag between the time you have to pay your suppliers and employees, and the time you collect??a payment from??your customers, can create a big problem for management.

The solution is about cash flow management.

In a recent interview with??Navman??Wireless UK Head of Finance, Allan Watt, we discussed the hot topic of Cash Flow Management and asked for his opinion on how get debtor lists under control.

Growing debtor lists are a concern for many businesses - what technology can a business put in place to help bring their list under control?

"Enabling customers to pay by Direct Debit means you're in control. In my experience, by offering Direct Debit, delays are normally avoided. At??Navman??Wireless, an excess of 80% of our customers??pay??by Direct Debt, which guarantees us cash on set dates.

"Credit Card payment facilities are also relatively easy to obtain these days and can provide your customer with an alternative payment method. Often those who are late with payments can recover the situation by paying using a business credit card.

We have set this up on our company website, as an automated payment portal, this requires a back end interface provided by the bank, the alternative is to have a card reading machine and take details over the phone.

"For any business getting invoices to customers on time is vitally important. Electronic??invoicing??transmission by email minimises the delay in receipt of invoices??and therefore??removes customer excuses of not having received said invoice.

"Companies who pursue electronic??invoicing??technology should look to cut down the turnaround time for payments"

Are there any practices a business could implement to ease the process of collecting late payments?

"Being as organised as possible is vitally important so having a??purchase??order system??in place provides clarity for both customer and supplier. Ensuring you have a PO number from the customer helps everything match and hopefully ensures prompt processing and payment.

"Having a proactive credit control solution is also a strong tactic and one that we use. I would??advise??making calls before invoices are due to check that your customer has everything they need to make sure payment to you on time. Although I don't think the call needs??to be??anything too heavy; but it gives an advance notice if there is any reason for non-payment - such as missing invoices.

"Debt factoring is also an option if you're worried about resource within your company.?? It entails effectively selling your debt to someone else to collect. This??can be??costly and can have a negative impact on your company's reputation if the collection process isn't done correctly.

"3rd part debt management - effectively outsourcing your credit control department ??? is another option. However, like debt factoring, it??may prove??costly. You do, however, get the benefit of advanced call scheduling and debt reminder letter automation, that some smaller businesses can't afford to undertake in-house.."

What other advice would you offer?

"Just aim??to be??as efficient, professional and polite as you??can be. Do your best not to leave a bitter taste in the client's mouth, and try to avoid doing anything that could risk damaging the relationship of your company!"

Click here??to find out how Vehicle Tracking from??Navman??Wireless can help effectively manage finance within your business.