Assess your client’s late payment situation (10 min)
Discuss and/or review in their accounting system the following:
- Do they extend trade credit?
- Do they have aged debts > 60/90 days old?
- Any improvement/deterioration in debtor book?
- Are their days sales outstanding static / increasing?
- Are they facing cash flow issues?
- Have they written off debts?
Identify red flags in their process (10 min)
If you have established an issue with your client’s cash flow and want to discuss how your solutions could support them – get your clients to acknowledge this cash flow problem themselves. We advise our accounting and bookkeeping partners to open up this discussion by asking:
- How are you feeling about cash flow currently?
- What in your business is keeping you awake at night?
These open-ended questions help to prompt detailed discussions about pain points in their business – and opportunities to help. There are 15 key prompts below to look for when clients are answering these questions, which suggest issues with accounts receivables and maybe an opportunity to introduce an app-based solution.
- Aged debtor book not improving/increasing
- Manually following up on payments
- Cash flow challenges
- Reduced headcount
- Days beyond terms increasing / not improving
- Credit Controller demotivated
- Company is fast-growing and raising more invoices
- Inefficient processes
- No ‘one person’ responsible for receivables
- Days sales outstanding
- Overwhelmed accounts team
- Delinquent payers
- Multiple overdue invoices
- Manager/team nervous about chasing invoices
- Invoice financing/ factoring
5 questions to ask clients about accounts receivables and how to help them (10 min)
1. Do you have a credit control policy in place?
If no: One of the first steps in protecting a clients’ business from the cash flow issues caused by late payments should be developing a formal credit control policy. If you identify a client without a credit control policy, you can share this credit control policy template to assist them: chaserhq.com/resources/credit-control-policy-template
2. Are you using credit limits for customers?
“Often, clients don’t have credit limits at all – and will merrily take on a piece of work! The concept of having a credit limit discussion and knowing where they stand is important.”
– Shared by Stuart Hurst, Director at Accounts and Legal in Chaser’s ‘cash in’ session
Setting credit limits is a critical part of effective credit control and, for SMEs, can be vital to ensuring consistent cash flow, if your clients need to put credit limits in place you can share this guide on how to set credit limits for business-to-business payments with them.
3. Do you have a credit controller?
If no: Without a dedicated Credit Control expert at their business, receivables management can often become de-prioritised and inefficient.
This can be an excellent opportunity to support clients with an app-based solution. In the meantime, to help your clients stay in the know about how to best manage their receivables process internally you can share key terms and best-practice guidance on all things credit control and accounts receivable with them.
4. How do you chase customers for payments?
Are your clients following up on late payments, at what intervals, and are they willing to pick up the phone and follow up on payments?
For many businesses, following up on late payments can be both awkward and time-consuming. If your clients don’t have an effective process in place, this is another great opportunity to introduce an app-based solution that can take away this burden for them.
Having the right approach to payment chasing is also important, so, using well-written, polite payment reminders and having an effective phone call script prepared for chasing over the phone is essential in helping clients get cash-in.
5. Do you have bad debts, how are you dealing with these?
Do your clients have bad debts accumulating, what steps are they taking to help prevent them, and are they escalating or writing off bad debts?
If clients aren’t taking an active approach in avoiding bad debts, consider introducing an app-based solution that will assist them in debtor tracking, credit checking and setting credit limits. If clients are simply ‘writing off’ bad debts, this is a further opportunity to
intervene as a level of escalation, or introduce a debt recovery solution.
Chaser supports accountants, bookkeepers and their clients in recovering bad debts in an agreeable, friendly way that keeps customer relationships intact: chaserhq.com/debt-collections.
Introduce benefits of accounts receivables automation (5 min)
With an accounts receivables automation software such as Chaser, you can reduce late payments in an efficient and friendly way, and improve your cash flow.
You can credit-check, monitor debtors, chase via email and SMS, collect payments, recover debt and reconcile accounts, all in one affordable platform, seamlessly connected to your accounting system.
This lets you streamline your processes and reduce time spend on credit control, so you can focus on growing your business.
Decision (5 min)
- Discuss next steps for reducing your client’s late payments
- Share pricing for accounts receivables automation
- Agree to send a written proposal
- Set a meeting date to review accounts receivables performance in one month
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How to reduce late payments agenda template summary
For accountants and bookkeepers looking to help clients reduce late payments and improve cash flow.