100 Ways To Improve Your Debt Management

“If you do not change direction, you may end up where you are heading.” –Lao Tzu

Having outstanding debt impact a large chain of consequence for a business, resulting in discontinuation of operation and change of business. That is because the inverse connection between outstanding unsecured debt and cash flow is the reason for cash flow representing a very important risk issue in the respondent company today.

Here are ways to improve your debt management;

1.       Set out a day-by-day strategy

2.      Decide your process for late payments

3.      Train staff

4.      Ensure policy is stuck to

5.      Communicate this policy to all customers

6.      Assess your performance

7.       Compare your performance to industry norms

8.      Make necessary changes

9.      Know what you can afford to offer on credit

10.    Ensure you have adequate resources to do it well

11.     Learn from your competition

12.     Get the right balance

13.     Use account opening forms so as to know your customers

14.     Know the full registered business name

15.     Check the business VAT number

16.     Work out what debts you have and what they total

17.     Compare what you earn, owe and spend

18.    See if you can consolidate your loans into one

19.     Pay your debts on time

20.    Try to pay the full amount outstanding rather than minimum owing

21.     Look at whether you can afford to make extra repayments

22.    Shop around for a better deal

23.    Have a back-up plan

24.    Know you can reach out

25.    Put checks and balances in place.

26.    Make upfront payments your policy.

27.    Set your payment terms – and stick to them.

28.    Offer incentives for early payers.

29.    Up to date systems and processes

30.    Prevention is better than collection.

31.     Send out your invoices promptly

32.    Work with the professionals.

33.    Confirm who invoices should be addressed to

34.    Know who is responsible for accounts payable

35.    Perform a credit check on application

36.    Credit check long-term customers too

37.    Check when large businesses pay their suppliers

38.    Look at their filed accounts

39.    See if they are a Prompt Payment Code signatory

40.    Build strong relationships

41.     Keep in touch

42.    Say thank you

43.    Look out for warning signs

44.    Keep a watch on industry news

45.    Use credit circles

46.    Set expectations

47.    Train employees to flag any odd financial behaviour

48.    Send as soon as possible

49.    Use e-invoicing

50.    Ensure it’s addressed to the right person

51.     Display credit terms prominently

52.    Include exact payment date

53.    Offer a range of payment methods

54.    Discuss any additional fees before sending

55.    Make a courtesy call to confirm receipt

56.    Pay particular attention to foreign debtors

57.    Explain your procedure for late payment

58.      Know who you owe money to and how much

59.    Put together a monthly budget

60.    Decide which debts to pay off first

61.     Pay what you can

62.    Curb irrational or impulsive spending

63.    Consider debt consolidation

64.    Pay your bills on time

65.    Have liquid savings

66.    Have a budget in place

67.    Watch interest rate risk

68.    Have an emergency fund for backup

69.    Pay particular attention to your late payment procedure

70.    Consult an expert

71.     Spread your customer base as widely as possible

72.    Keep on top of your sales ledger

73.    Know exactly when every invoice will exceed terms

74.    Identify proportion of invoices unpaid beyond agreed terms

75.    Update cash flow forecasts

76.    Implement plans for cash flow gaps

77.     Update technology

78.    Consider credit insurance

79.    Consider invoice finance

80.    Maintain a strong relationship with your bank

81.    Negotiate with suppliers

82.    Incentivise sales teams only once cash has been collected

83.    Encourage early payment

84.    Regularly benchmark suppliers

85.    Regularly benchmark suppliers

86.    Charge late payment interest

87.    Focus your attention on high-risk debts

88.    Target older debts

89.    Compile a stop list

90.    Get rid of repeat offenders

91.     Don’t be bullied into accepting poor payment practices

92.    Know your limits

93.    Improve skills

94.    Follow through on warnings

95.    Report late paying customers

96.    Ask for part payment

97.    Don’t be afraid to confront the issue

98.    Remain professional

99.    Hire a dedicated credit controller

100.  Consider outsourcing

A company focused on debt management enables you to come up with a plan to deal with your financial obligations proficiently. To ensure that your finances improve, it is essential you use a debt management plan.

You can make a debt management plan for yourself or go through credit counseling to help you with your plan. Both options have benefits as well as disadvantages. Creating a plan yourself is the easiest way forward, but sometimes it can be easier to have an objective third party devoted to helping you or making sure you’re on track.

“Rather go to bed supperless, than rise in debt.” -Benjamin Franklin