L O CA L FO CUS FE AT URE
MANAGING YOUR DEBTORS WITH VICTORIA BERRY
Hi there, Victoria from HBA Encompass, today we’re talking about managing your debtors. Debtors are also known as accounts receivable. They are the bills or the invoices that you issue to your customers that require payment. To be honest, the easiest way to manage your debtors is to make it easy for people to pay you. That means having bank details on the invoice. You may be surprised how many invoices I’ve actually seen lately that don’t have bank details on it, which is amazing. How do they expect to be paid if they don’t have payment details? I don’t know. If you use Xero, you can actually link payment services up to your Xero account. Payment services include PayPal, Stripe, Eway or Go-cardless. This means that when someone clicks through to the invoice, they can click on the link and then put their card details in and you actually get paid. Stripe takes credit card payments, PayPal takes credit card payments, but Go-cardless actually takes debit card payments. So sometimes it’s worth thinking about both options and linking them together. Another thing that you want to do is to set up debtor reminders. I’m talking about Xero here, because we love all things Xero. In Xero, you can set up reminders that go out to your customers, and you can set the frequency and the tone of them. For instance, you could set reminders like this: Two days before your bill is due that says, “Hi Victoria. Just a reminder that your invoice for HBA Encompass is due in two days. We look
forward to receiving your payment and hope you are happy with our services. If not, get in touch.” On the day of the payment, “Hi Victoria, friendly reminder that your invoice is due today. If you’ve already made payment, please disregard this message.” Two days after, “Hey Victoria, looks like we haven’t received your payment yet. Are there any issues? Give us a call and we can sort it out.” You can have up to five of these reminders and you can work out the timing, whether they’re before or after the actual bill is due. It’s quite easy to manage debtors from that point of view because you can make it easy for people to pay. Naturally these can change in tone as time goes on, the last one could say that if the bill is not paid within 48 hours, the company will refer you to debt collection. But hopefully it doesn’t get to that. Remember, if you do go down that process, make sure you have got processes and procedures as to who’s responsible for following people up. It’s also important to review whether you are still making it easy for your customers to pay. In a nutshell, that’s how to manage your debtors. If you have any questions regarding any Xero, bookkeeping or accounting issues, give the office a call 07 5444 7094 or go to www.hbaencompass.com.au and book an appointment with your accountant. ca
P: 07 5444 7094 E: admin@hbaencompass.com.au www.hbaencompass.com.au 26 ISSUE 101
