As we enter a new year, it's the perfect time to evaluate how we can make 2024 the best year in business. One crucial aspect to focus on is optimising your debtor management to improve cash flow and drive financial success. I recently came across an insightful graph from Xero that analyzes the average time it takes for your customers to pay you, and I'd like to share some valuable tips with you.
Over the past three years, we can observe a positive trend in the days to be paid. From approximately 27 days back in January 2017, the number has decreased to about 23 days. However, there are tools and strategies you can leverage to further reduce this number and expedite payments.
In this short video, I share my actionable tips on how to get paid faster.
A snapshot of the tips in the video above to implement and reduce your debtor days:
Understanding the current trends
Proactive communication with customers
Leveraging automated reminders
Customer notes
Credit management best practices
Terms of trade and engagement letters
Maintaining a clear division of roles
Incentivising your accounts division
As you embark on the journey of optimising your debtor management, remember that even reducing the average days by one or two can significantly impact your business's well-being. By implementing these strategies and leveraging the right tools, you can unlock hidden potential and make 2024 an exceptional year for your business.
Feel free to reach out if you have any questions or would like to discuss this or any other topic. I'm always here; click here to book an online catchup.