RichieG
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- Joined
- Sep 27, 2018
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I have been running a business now for 9 years and built it up from scratch. This started very locally so deals were done simply and with a handshake. We would send a confirmation email out about the deal and list the terms on here as well as the invoices each month - so people knew what the were getting.
Local Businesses ( who are our customers ) can pay quarterly by cheque or bank transfer ( and some still like cash ) or you can pay monthly by standing order ( automatic payment )
The 2 deals we offer are month by month which is more expensive. Or a deal which carries a 3 month notice period but is discounted.
When we started this payment method and were very small it all worked well. Yes a few people didn't set up the standing order and paid manually ( sometimes a bit late ) but generally bad debt was very low.
Now 9 years on and we are a bit bigger the lack of "sticking to what was agreed" ( standing order ) is bogging us down a little. A few more customers are paying late, trying to jump out of deals and bad debt has risen.
I have a few thoughts on what to do but would like a bit of advice:
1) Current Late Payers and Bad Debt: Should we write these debts off or go to a debt collection agency. Some bills are low but some are high. As we are a regional business I don't want word getting out we are a soft touch and write invoices off easily
2) Would you make sure all customers ( even if they have been with us for 9 years ) are on the correct payment scheme and aren't allowed flexi terms dictated really by themselves. The majority do pay eventually but it takes time chasing invoices. The worry is we will lose these customers
Just concerned we are looking to scale the business and if this isn't right we will hit problems down the line
Look forward to hearing from you.
Local Businesses ( who are our customers ) can pay quarterly by cheque or bank transfer ( and some still like cash ) or you can pay monthly by standing order ( automatic payment )
The 2 deals we offer are month by month which is more expensive. Or a deal which carries a 3 month notice period but is discounted.
When we started this payment method and were very small it all worked well. Yes a few people didn't set up the standing order and paid manually ( sometimes a bit late ) but generally bad debt was very low.
Now 9 years on and we are a bit bigger the lack of "sticking to what was agreed" ( standing order ) is bogging us down a little. A few more customers are paying late, trying to jump out of deals and bad debt has risen.
I have a few thoughts on what to do but would like a bit of advice:
1) Current Late Payers and Bad Debt: Should we write these debts off or go to a debt collection agency. Some bills are low but some are high. As we are a regional business I don't want word getting out we are a soft touch and write invoices off easily
2) Would you make sure all customers ( even if they have been with us for 9 years ) are on the correct payment scheme and aren't allowed flexi terms dictated really by themselves. The majority do pay eventually but it takes time chasing invoices. The worry is we will lose these customers
Just concerned we are looking to scale the business and if this isn't right we will hit problems down the line
Look forward to hearing from you.
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