Our friends over at Debtor Daddy penned this short survey to help you workout if its time to automate your invoicing reminders with their slick invoicing reminder tool.
So you think you may have an issue with cash flow — either you're feeling the pinch when it comes to paying your creditors at the end of the month, your accountant has told you get some invoice-chasing automation in place, or you're just sick of having to get on the phone and have those awkward ‘’where’s my money?’ conversations.
You might have heard about Debtor Daddy – the automated invoice chasing system – but aren’t sure it will actually make a difference to your bottom line.
Well simply answer these five questions below and you’ll soon know whether it’s for you…
1. How many hours a week do you spend chasing debtors?
Whether it’s you or a member of staff chasing overdue invoices, calculate the number of hours you’re spending every month following up trying to get paid.
Two hours a week? That’s more than four working days a year!
Now calculate how much that, in wages (not to mention stress, frustration and cash flow problems), is costing you. More than a cup of coffee a week? Then it’s probably time to move to an automated system.
2. How are your client relationships?
It’s difficult to do business when you’re waiting to be paid. Not only are awkward ‘pay me, please’ phonecalls difficult to have, they can be problematic for maintaining a friendly working relationship.
Similarly, it’s difficult to negotiate on new projects when outstanding invoices loom over the conversation.
If you’re uncomfortable making that bill-chasing call, if you’re in doubt as to whether your staff have the nous to perform such calls well, or if, heaven forbid, you’re putting off chasing overdue invoices because you hate the process, a system that keeps invoices in check automatically is likely a good choice for you.
3. How much are you owed in aged receivables?
Prompt payment of receivables (or lack thereof) are a sign of your customers financial health (or lack thereof). Overdue invoices – and any trending towards invoices being paid more slowly – is a warning sign that business may be slowing down and cash flow becoming tight for that customer.
Simply put, if your client’s accounts are overdue it’s indicative that that client is becoming a credit risk.
And those outstanding bills cost you. Use this financial impact calculator to find just how much they’re affecting your business.
4. Have you been worried about being able to pay your creditors?
Make no mistake – poor cash flow can kill a business. When a business goes under and is unable to pay its creditors, that often has an insidious run-on affect for those companies owed money. And the bigger the percentage of revenue that a client company represents, the bigger the risk.
If you’ve been under pressure when it comes to paying your creditors – because you’re still waiting to be paid by your debtors – your need to get your cash flow under control.
Making sure invoices are paid promptly is essential to protect yourself from risk and the best way to do that is via an automated invoice reminder system.
5. …Are you in growth phase?
When you’re seeking new opportunities the last thing you want to be doing is looking over your shoulder, trying to get paid for last month’s (or worse) work. Having an automated system in place to chase debtors will let you focus on the future instead of pouring over your past efforts.
A ‘set-and-forget’ invoice chasing system like Debtor Daddy can take the invoice management hassle off your hands entirely, freeing you up to seize new opportunities, source new work and grow your business (not your debt).