Chasing after clients for unpaid invoices is not exactly the easiest thing that a business owner has to do. But it is something that comes with the territory, so they usually take it in their stride and accept the challenge. However, in the past couple of years, this challenge has turned into a nightmare. Many small business owners in Australia reported that they now spend most of their time begging clients to pay for already completed work.
A Growing Problem
This alarming issue is reflected in a recent survey of more than 500 Australian businesses. The survey revealed that although the amounts owed to businesses have stayed stable, the chase for payments has intensified.
Out of the business owners surveyed, 34% found it significantly more difficult to pursue debtors. Moreover, almost half of SMEs said that when they got in touch with a debtor, the concerned party would challenge the amount they owed.
Unfortunately, this is delaying tactic is a common practice among debtors. Many complain that they have not yet paid because they were not happy with the service provided or with the quality of work.
Other clients say they are unable to settle their accounts because of tough economic conditions. Over 60 percent of customers with outstanding invoices say they were affected by increased living costs or general hardship. Meanwhile, 13 percent say they cannot pay on time because their household bills get in the way.
How SMEs Can Improve Debt Collection
The fact that more SMEs are now struggling to collect payments from clients is devastating. This represents a threat to their survival as they rely so much on cash payments from clients to keep their business afloat.
While debt collection might not seem like the most stimulating part of running a business, it is still a very crucial function and one that deserves more careful attention. Take a moment to go over your invoicing and debt collection process and identify the areas that you must change or improve.
Perhaps you do not yet have a set system for sending out invoices or for following up on them. You may benefit from automating your follow-up or communication system. This way, you make sure no invoice gets forgotten. Of course, you can make this process a lot easier by contacting a professional debt collection agency.
Slater Byrne Is Here to Help
Slater Byrne Recoveries specialises in collecting commercial and small business debt. We offer simple yet highly efficient debt recovery solutions that meet the unique needs of our clients.
Call us now at 1300 794 290 for a FREE consultation! You can also send us an email at in [email protected].