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A Good Christmas Starts in October

Kim Radok24 September 2013

A GOOD CHRISTMAS STARTS IN OCTOBER

The truth is, getting paid and following up on your unpaid invoices, is a year round function that never stops. Unfortunately many business people and their managers do not make the management of their unpaid invoices a priority. They always have a reason for why they cannot concentrate on this function.

If this is you, then this may explain why at Christmas, your debtors or unpaid invoices dollars are high and your bank balance dollars are low. To counter act this situation, if you have been slow to follow up on your unpaid invoices, then now is the time of year to act. That is why I emphasise, "A good Christmas starts in October".

If you start following up on your unpaid invoices now, you will have a better bank balance at Christmas then if you start trying to make your contacts in December.

There are many reasons why you should start making contact for the unpaid invoices all year round.  However if you are disorganised or have prioritised other duties first, it is now more critical than ever, you start making contacts for those unpaid invoices. The reasons why you need to start know if you want cash for Christmas include, but are not necessarily limited, to the following.

1 Your attitude of not contacting your customers earlier indicates that you place no urgency or importance on being paid promptly. Therefore when you suddenly make contact in December, they see no urgency to pay you just because you have now made contact.

2 Your customers may not have received your invoice(s). Even if you forward the missing invoices immediately, it may still take some time to have the invoice authorised and included in the next payment run.

3 You may not have bothered to answer your customers' enquiries about invoicing issues. So these invoices will remain unauthorised until you answer your customers' enquiries.

4 The order may be incomplete and the invoice is not due and payable at this time.

5 The authorising / payment person may be absent for holidays or illness.

6 Your customers claim they are short of funds and cannot pay you until ...? After all, you will not be the only supplier asking for money in December. Remember it is the early bird which gets the worm. Therefore other suppliers having made contact earlier may have priority over your customer's cash.  

7 Your customers may just be stalling because they are naturally slow payers or fraudsters.

What Can You Do?

The following suggestions are designed to help you have the best possible bank balance by Christmas. There is no guarantee because you suddenly follow these processes you will be paid. However you will be in a much better position than if you waited until December to make your contact.

1 Admit you have a problem and need to do something NOW. If you cannot be honest with yourself at this stage, you will wait till December and miss out again.

2 Employ extra staff on a short-term basis to help you contact your customers for the unpaid invoices. Other industries and professions employ extra staff to meet the Christmas rush. It is just a normal business strategy for that time of the year.

These extra staff will also help you complete all the other extra work which seems to occur at Christmas, plus your normal day to day work at the same time.

3 Focus on all unanswered customer enquiries and resolve any issues which are preventing the customer authorising your invoices and paying you.

4 Find out when the customer completes their payment runs each month. Make sure your customer has all your invoices in time to be authorised to meet these payment run dates.

5 If you start making contact soon enough, you will quickly find out which customers are stalling or have no intention of paying. Once identified, you can quickly send these problematic accounts to your debt collector.

There is no guarantee by undertaking these actions you will reach your ideal bank balance. However, you will find your bank balance in much better shape than if you had waited until your normal practice of the last minute contacts in December.

Improving you bank balance and having more cash, will help you enjoy your Christmas that much better.

Kim Radok

 kim@creditmatters.com.au

 www.creditmatters.com.au  

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