The Christmas break is a time of year when many businesses go into hibernation and lay low.
This can be a dangerous time for your company, as it might lead to invoices going unpaid and customers becoming more aggressive about payment. It can also end up putting more pressure on your business finances and credit control routines at one of the busiest trading times of the year.
If you want to stay on top of your business during the festive season, here are 9 tips that will help deliver the goods:
1. Make sure to factor the holiday break into your billing cycle
The 'holiday season' encompasses a few events, like Easter, Christmas, and New Year, which can all impact the likelihood of your getting paid on time.
Be sure to factor the holiday break into your billing cycle and send invoices sooner rather than later.
While adding in a little lead time to accommodate the holiday break is a good idea, don't be afraid to reach out to customers and establish how their payment processing changes during the holiday season.
A quick phone call to establish when they stop trading can give you all the information you need to send your invoices at the right time.
If you're expecting a lot of invoices to come due around Christmas, you can also shorten your payment terms. It's a good idea to let your customers know that they'll have a shorter window for payment this year.
You might also want to ask them whether their financial situation changes over the holiday season – if so, you might not want to push for payment until the New Year.
2. Transition to digital billing and payments
This is a good time of year to be thinking about how you communicate with customers, and what information they need from you for them to make their payments on time.
If you're sending pre-printed invoices over email or using PDF invoices, now might be the time to transition into more modern methods such as Xero or Quickbooks.
The benefits of using digital invoices include:
- Automatic payments - customers can easily pay their invoice by clicking a link, and the payment is processed immediately
- Easy to keep track of payments received and outstanding invoices
- Automated invoicing and reminder emails
- Seamless Integration with other accounting software
- Reduces the time it takes to process payments (and therefore speeds up your cash flow)
If you're not already using digital invoices, now is the perfect time to make the switch – especially as we head into the Christmas break.
3. Make sure you know who pays the bills
There is a good chance that there is one person working at each one of your customers who actually greenlights the payment of invoices. Getting to know that person and building a relationship with them can help to ensure that invoices are paid on time.
Building a positive relationship based on open communication is key and can mean your invoices get processed far more rapidly. If nothing else, building this kind of relationship means you have someone specific to call to get answers about where your invoice is in the payment cycle.
4. Keep the December 31st cut off in mind
A lot of B2B companies prefer to retain invoices paid in December and pay them off in January. If you are relying on these payments to make payroll, be sure to keep this in mind when scheduling your payment cycle.
You can mitigate this in a number of ways. One option is to ask new customers if they close their books on December 31st as part of the onboarding process. Another option is to use your records to analyse historic payment trends to see if customers have delayed December invoices to January in previous years.
Knowing this kind of data in advance will allow you to plan for the worst in terms of cash flow.
If you also close your books on December 31s, it's worth considering whether you want your invoices paid in December, which adds to your taxes, or whether it's better to accept that payment being made in January.
5. Check up on historical late payers
If you have customers who are perpetual late payers, now is the time to reach out to them and ask about their holiday season payment schedules. Politely reminding them of your payment terms and the fact that they agreed to them when they signed the contract is a good place to start.
If you've been in business for a while, it's worth checking whether or not these customers have ever paid on time. If there are historical payment issues with the customer, now is the best opportunity to find out what their holiday season plans will be and make sure your cash flow projections reflect this.
Remember, credit checking doesn't stop after the onboarding process. It's an ongoing activity that should be done at least every quarter. Thankfully, with Chaser, credit checking functionality is built right into the platform, making it easy for you to credit check customers on a regular basis.
6. Choose the right debt collector
If you're still having trouble getting customers to pay their invoices on time, it might be worth considering using a third-party collections agency. This can be expensive, but it may be the only way to get your money back.
Collections agencies are great for situations where you've exhausted all other options and need help getting paid by a delinquent customer. Make sure you research several agencies before selecting one, as rates and services can vary greatly.
Also, keep in mind that using a traditional collections agency will likely damage your relationship with the customer. There is, however, another option.
Chaser offers professional debt collection services with a focus on maintaining the good relationships you've built with your customers. We work hard to get you the money you're owed without damaging your reputation.
We use mediation, rather than threats and harassment, to encourage customers to pay you. We work with your customer until the debt is satisfied, and we give them a range of options for how they can repay what they owe.
If you're looking for a collections agency that will help you get paid without ruining your relationship with customers, Chaser is the perfect choice.
7. Automate your invoice chasing and credit control
Late payments are a real problem for SMEs regardless of the time of year. Each year, late payment of invoices costs SMEs in the UK an estimated £51.5 billion.
The cost of these late payments is passed on to the business and the business owner, with 27% of businesses saying late payments have hit profits, while 12% said the issue had forced them to defer pay for staff.
On a personal level, small business owners often have to cover the gaps created by late payments, with 80% using personal savings to keep their business operational.
For many business owners, the stress of dealing with late payments comes at the cost of their mental health.
There is also a cost associated with chasing late payments. Nearly half of all small business owners say they spend two or more hours each week chasing payments that are late and that chasing late payments costs them more than £500 a month.
That's why it's important to automate your invoice chasing and credit control as much as possible. This will free up your time to focus on more important things, like growing your business.
Chaser's full suite of automated credit control options allows you to send the right message to your customers at the right time. Because the messages sent can be edited to reflect your tone of voice, your relationship with the customers, and appear to come from your email address, you can take advantage of all the benefits of automation, without losing the human touch.
By using our automated functions, Chaser's customers get paid, on average, 16 days sooner and save an average of 15 hours a week on chasing unpaid invoices.
8. Make it easy for customers to pay swiftly
The best way to get your customers to pay you is to make paying as easy as possible for them.
Instead of simply relying on the old standbys of credit and debit card transactions, offer more payment options. If you're not already doing so, consider accepting payments through PayPal or other e-commerce platforms.
Make sure your invoices are clearly laid out and easy to understand, with all the necessary payment information included.
Include a link to a payment page on your website, where customers can make a quick and easy online payment.
Chaser uses unique Payment Portal to help our customers get paid quickly and easily.
Each invoice or reminder sent out through Chaser includes a link to a Payment Portal unique to that customer that contains all your payment details, their purchase history and overall outstanding amounts, and a full range of possible payment options.
By using dedicated Payment Portals, Chaser customers can get paid within minutes, without the need to chase down payments or spend time on administration.
If you're looking for a way to get customers to pay their invoices on time over the Christmas break, Chaser's unique Payment Portal system is the perfect solution.
Our easy-to-use invoicing and payment systems make it simple and convenient for your customers to pay what they owe, while our team of experts are always available to help with any questions or problems.
9. Outsource your credit control!
If you are still struggling to get on top of your credit control this Christmas, why not outsource to Chaser? We can take care of everything for you, so you can relax and enjoy the festive season.
Our credit control teams are experienced in dealing with late payments and will work tirelessly to get your money back on track. As with our debt collection service, we work in a manner that preserves the good relationships you've built with your customers.
Instead of going through the hassle and cost of recruitment, outsourcing allows you to focus on what you do best, running your business. Our professional credit control specialists will be on the job from day one and at a fraction of the cost of hiring in-house.
Our friendly staff will work tirelessly until the job is done so that you can continue focusing on growing your business without worrying about the impact late payments are having on your business.
If you'd like to find out more about our credit control services, get in touch with a member of the team today. We'll even throw in some advice on how you can improve your own processes and procedures over Christmas!
Have a stress-free Christmas
Christmas is coming and no one wants to spend their time over the Christmas break chasing down unpaid invoices.
But by using Chaser's automated functions, you can take advantage of all the benefits of automation, without losing the human touch.
Get paid sooner, save time, and relax – it's as simple as that!
