How to manage debtors better: Three easy tips
“Managing my debtors is taking too long. How do I manage my debtors better?”
It shouldn’t take more than 10 minutes a couple of times a month to manage your debtors, depending on how many there are.
Here are my top tips for streamlining the process.
Make sure your bills are in Xero
Ensure that all your bills are processed using Hubdoc or another software and configured correctly to post to the correct account with the correct VAT.
Set calendar reminders to make payments twice a month on the 2nd and the 16th or 17th of every month. This way you cover most businesses’ payment terms because most are 30 days.
Some are fewer and some are more, but most are 30 days. For example, mine is 5 days. In which case you would tell me as your supplier, that you make payments twice a month and my payment will be a few days late.
With clear and timely communication most businesses can usually make adjustments.
Then on the 2nd and the 16th, you just log into Xero, click on ‘Business’ then ‘Bills to pay’ and click ‘Awaiting payment’ and look at the due dates. If the date that day is the 16th, then simply make payments to all the bills that are due before the 16th of the month. Likewise, if the date is the 2nd of the month, you pay any bills due before the 2nd of the month, ensuring you don’t pay any that were paid previously on the 16th. This way you’re always paid up to date.
Ask for convenience
Ask debtors if they have a more convenient way or day to pay. Do they have GoCardless or Stripe so you can set up automated payments? Or if you would prefer a different payment frequency then let them know so you can discuss the options available. This way you can cut down the time you spend making manual payments.
For more tips on using Hubdoc for Xero to manage debtors better, and much more, subscribe to our newsletter here.
Contact us about how we can help you streamline all aspects of your business systems better with a little superstar treatment, on:
Telephone: 020 3362 4436
Mobile: 07811 393520