15 September, 2020 / IN Business Advisory / by Jason Ginns
Debtor management has always been important… but it’s about to become even more important than ever.
Debtor or receivable management has always been central to the effective cash flow of any business. Without an effective debtor management system, even the most profitable businesses can quickly find themselves in a vulnerable position.
This has been as important as ever over the last six months, as businesses have managed their customer payments and the impact of COVID-19. However the real crunch could be just around the corner, with the impending end of JobKeeper payments, home and business loan repayment holidays ceasing, and other stimulus measures like the Cashflow Boost for PAYGW Employers and ATO debt deferral periods finishing up, all of which will impact the ability of your customers to pay you on time and in full.
Review Your Debtor Management Now
Now is the time to review your debtor management systems to ensure the ongoing review and efficient collection of debts owed.
A good system starts with your credit policy and terms of trade, which allows the efficient and prompt issuing of invoices at the time of providing your services or goods, and extends through the ongoing review, follow up, and collection of your customer payments.
Harnessing the capabilities of your internal accounting system is also important in the early stages of the process. This allows you to automate some of the processes, ensuring customers are receiving invoices in a timely manner electronically, and regular automated reminders that encourage and remind clients to pay their invoices within your terms.
Lambourne Partners’ aim is to improve your debtor management processes by:
- Reviewing your existing debtor management system to develop an understanding of your current debtors process
- Review your existing debtors, identifying which clients are outstanding and understanding why
- Identifying potential issues with your current process
- Providing you with an action plan to correct these issues and improve your cashflow.
We’re Here to Help
Our message has been clear from the outset – if you are clear, calm, and have a plan, you will have a competitive advantage over most businesses. This extends to your debtor management system.
Lambourne Partners is here during these difficult times to support and provide guidance to you and your business. Lambourne Partners is an integrated advisory practice offering a full range of services to our clients. We thrive on helping owners better understand their businesses and their personal wealth through the numbers.
If you’re interested in understanding more about how we can help you improve your debtor management processes, which is about to become even more important than ever, please contact us below to find out how we can help.