Managing Late Payments
- Allison Sylvester-Conliffe
- Jun 26
- 1 min read
As a business owner, chances are that you may have encountered situations where clients are late in settling their commitment to you.
"Time is money" couldn't be a truer statement as it pertains to managing overdue invoices.
Here's why -
Aging Debt = Lower Recoverability
This means that the longer a balance remains unpaid, the less likely it will be collected.
In my experience, I've seen where collection rates drop significantly after 90 days.
In order to avoid this occurence, it is best to -
🡲 Prioritize Early Action
Timely follow-ups and reminders can greatly improve payment outcomes. You should not wait until the debt becomes a distant memory to begin to act on recovering it.
🡲 Technology Can Help
Use accounting software which provide automated systems to send invoices and reminders on schedule. Remember that you can consider outsourcing this task.
💡 Here's an important take away -
Ageing debt impacts your cash flow. Therefore you should stay on top of your receivables in order to promote and maintain a healthy business!
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