The Octempo:RM Blog

Don’t be a statistic: Make sure you’re not one of the 34% of UK SMEs who write off £1000s of bad debt every year.

Tuesday, 28 July 2015 11:06 by The Late Payment Assassin

From speaking to our customers, we weren’t surprised when we read the research from Satago that said that 1/3 of UK SMEs write off thousands of pounds of bad debt every year. After all, we know first hand the problems that our customers have when they first seek help and advice from Octempo. Here are some simple ways for business to avoid the pitfalls of inadequate credit control.

(1)  Vet your potential customers:

Ormsby Street revealed last month (May 2015) that UK small businesses who regularly credit check their customers are around 30% less likely to go out of business in their first 12 months than businesses which don’t credit check. Using a credit checking service allows you to see whether your customer is likely to be a good payer or not, thus avoiding the issue of late invoice payments later down the line. For more information on one off credit checks, without subscription, available for your customers UK and abroad, request a call back.

(2)  Prevention is better than cure:

Keeping on top of your credit control is vital for the cash flow of your business, yet many businesses take their eye off the ball at this crucial part of the sale. Often in SMEs, the burden of credit control falls to the already over-burdened owner or director. If this sounds familiar to you, then you may want to add someone to the headcount, or outsource this to a specialist who will take control of your credit control and forge strong relationships with your customers on your behalf, under your brand name. 

(3)  Don’t be afraid to take recovery action:

Sometimes, for a variety of reasons, your invoices may remain unpaid and become a problem to the business. In situations like this, when the two parties are at stalemate, it may be worth involving a 3rd party to collect the debt on your behalf. Importantly, if your debt is overseas, you would benefit from using an International Debt Recovery specialist to ensure they speak the same language and communicate more effectively.

 

At Octempo, our aim is to make sure our customers never have to worry about bad debt again, so if you want further information on Credit Checks, Credit Control or UK and International Debt Recovery, request a call back or contact us today.

Game, set and match to on-time payments

Thursday, 2 July 2015 11:27 by The Late Payment Assassin

If unpaid invoices are the bane of your life and you feel like you are forever chasing for payment, it may be time for you to consider outsourcing your credit control.  If you’ve never thought of it before, let us give you a steer on what you can expect from letting go of the responsibility and leaving credit control in the hands of the experts.

 

Have you ever calculated how much time you spend on chasing payments for your business? Or are you more likely to let invoices slip into arrears due to the huge demands on your time?  Whatever your reason for reading this blog, it sounds like you could do with a helping hand.

 

At Octempo, we recognised that our customers wanted a more flexible solution to credit control, a solution that didn’t cost the earth – but meant that the worry of cash flow was taken away.  Most businesses have customers who pay on time and customers who don’t.  By selecting which invoices are outsourced, it means you only pay for the ones that take up your time and effort, the ones may impact on your cash flow.

 

Credit Control – Select allows you to be selective over the invoices you put in our control from just £19.99 a month plus a one off set-up free.  For this, you will get a team of professional credit controllers who work under your brand name with branded phone and email communication so that we can work as a seamless extension to your business.

 

Once an invoice has been submitted to us online, we will go to work to turn that into a successful payment. Once we have collected, we will apply a commission fee based on the age of the invoice and location of the customer. You'll never have to worry about overdue invoices again, for just one low monthly fixed cost.

 

If the sound of full time credit control for just a part time cost sounds like a great fit for your business, why not contact Octempo? Our solutions can be scaled to fit any business large or small and range from early-arrears solutions to full-scale international debt recovery. Make late payments a thing of the past.

 

FINGERS CROSSED FOR ON-TIME PAYMENTS?

Wednesday, 17 June 2015 12:02 by The Late Payment Assassin

Receiving payments on time is crucial for any business; the late payment of invoices can seriously disrupt cashflow, resulting in a negative chain reaction. So what is your approach to late payments?  We take a look at the options available to your business when payments don’t arrive on time.

According to research by Satago, 77% of UK SMEs do not have a person or procedure in place to establish an escalation process for late payments, even though half struggle, and many cannot survive the cashflow problems that they create. So, rather than crossing your fingers and hoping for timely payments, how about checking out our handy hints on how to avoid late payments and how to go about developing an escalation process in your business.

 Octempo tips for on-time payments

  • Invoice on time with accurate details: sounds easy, but missing off a purchase order number or sending an invoice through to the wrong contact can be the cause of avoidable delays.  Take note of your customer’s payment terms and work these to your best advantage.
  • Be organised with invoicing and collections: It’s easy to let this slip as you are immersed in the day to day running of your business, but try to set aside time each week to keep on top of invoicing.
  • Don’t be frightened to chase invoices: Due dates are there for a reason, it is perfectly acceptable to enquire politely, there may be a genuine mistake or oversight. 
  • Don’t send in the big guns straight away: Friendly, courteous conversations can help develop relationships and improve future payment times. Don’t be tempted to wade in with early threats and supply cut off.
  • Take advantage of late payment regulations: Did you know that you can charge 8% ‘statutory interest’ if another business is late paying for goods or a service? Although it’s estimated that only around 1/3 of SMEs actually implement the interest charge. Late Payment Legislation also allows you to add the cost of using a third party such as a debt collector, and this is a very powerful tool in securing payment. Read more here: https://www.gov.uk/late-commercial-payments-interest-debt-recovery/when-a-payment-becomes-late
  •  Outsourced credit control: Professionals like Octempo can provide flexible solutions that fit in with your business. As soon as the invoice is raised, you can be safe in the knowledge that it will be followed up by trained credit controllers and paid on time.
  •  Know when it’s time to take recovery action: If all else fails and the invoice remains unpaid, you may need to speak to a specialist debt recovery company.  For advice on UK and international debt recovery click here.

If you need help establishing an escalation strategy for your business, why not contact Octempo? Our solutions can be scaled to fit any business large or small and range from early-arrears solutions to full-scale international debt recovery.

You need never let a payment be late again. 

 

Good credit control - How to prevent bad debt and get invoices paid on time - Volume 4 - Late invoice payment

Tuesday, 14 January 2014 21:16 by The Late Payment Assassin

 

Wouldn’t it be great if all your customers paid you on time, automatically without any intervention? Unfortunately they don’t. In previous blogs I’ve touched on the earlier stages of credit control. Focus for this blog is late payment. You need to be tough with your customers – not aggressive but professional. And you need to do what you say you are going to do, otherwise your credibility is undermined and your debtor knows you are a soft touch.

 

As soon as an invoice goes overdue there should be a clear sequence of events that follows, and that your customer understands. Phone calls initially going through to more formal letters – with set days in between - and then to the point that you instruct a third party to begin the debt recovery process. Other suppliers will be getting paid whilst you dither. Make sure the debt recovery agency that you use has the right experience. Ask for references – we always provide them on request in Octempo and also post them on our web pages.

 

With late invoice payment you generally get what you are prepared to accept. If you get the earlier stages of your credit control process right then late payments should be in the minority. Don’t let late payment become the norm as then – as with most habits – it becomes difficult to break

Good credit control - How to prevent bad debt and get invoices paid on time - Volume 3 - Credit control collections process

Friday, 20 December 2013 20:45 by The Late Payment Assassin

Get on the phone and talk to your customers. OK so that wouldn't make a very interesting or extensive blog post but it's the simple truth. Good credit control is about using the phone and following up invoices before they fall due for payment. Let me explain.

 

Scenario 1 - a business invests in some great software. It automatically emails statements and sends reminder letters. Requires a lot of set up and maintenance from the business. They sit back and expect collections to improve and debtors to reduce. They don't. Letters and emails can easily be ignored and the recipient feels no shame in doing so. After all they probably get 100 emails a day

 

Scenario 2 - a business engages someone to do follow up calls and build a relationship with the Finance contact at the customer. Need to get the right person with the right personality to be comfortable chasing for cash but not too agressive. Calls don't get ignored, particularly if they know you will always ring until you get connected. Makes ure you get the right person to speak to though. We often come across credit controllers who are afraid of the phone....so be careful. Couple of months in with this new calling regime and debtors are reducing and cash flow looks healthier all round

 

You also need to make sure you get the right metrics to measure the performance of your credit control. At the very least you should be looking at a cash flow forecast based on expected payment dates. Each week you should review an analysis of older debt and ensure actions are in place to fix. Set targets for aged debt e.g. nothing over 60 days overdue. Look at the average days it takes your customer to pay and track the trend which should be going down.

 

Lastly the speed with which you resolve queries and fix invoicing problems is the biggest single contributor to successful credit control and prompt payment. Monitor your queries, fix the problems giving rise to them so you can avoid in the future, and ensure that all queries are resolved quickly. No queries = more cash in the bank 

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