Benjamin Franklin said that ‘creditors have better memories than debtors’, so how can SMEs ‘remind’


There are a lot of things businesses can do to ensure that invoices or loans are paid on time. For example, good relationship management and prompt invoicing can work wonders for your cash flow.

But what happens when your customers don’t pay? What happens if you have made a loan that has not been repaid? We know that our clients have sleepless nights worrying about unpaid invoices or debts, and in particular, the feeling of being between a rock and a hard place because legal proceedings can be costly.

We think that it is important for businesses to exhaust all other avenues before hitting court!

So, what are your options when your debtors have a selective memory when it comes to meeting their obligations?

1. Make a phone call

Today this is often overlooked. It is easier to be a ‘keyboard warrior’ and write an email demanding that a debt be paid. Sometimes the tone of these types of demands can risk an ongoing relationship with your client or even harm your chances in court. Instead, give the debtor a call and find out why the debt hasn’t been paid. Be prepared, and ask questions to find out the root of the issue. Most importantly remain calm, don’t be assertive - it is possible that the debtor may be experiencing cash flow issues and did not know how to approach your business about meetin

g its obligations. Often these candid conversations with your clients can work as a further building block in a long-lasting and profitable relationship.

2. Be strategic

Sometimes you are never going to be immediately repaid in full. Talking about a payment plan is a good way to maintain relationships and also to get paid. This will increase your cash flow and can be a win-win situation for both you and your customer. If a payment plan is negotiated, it is worth giving us a call to make sure that you document the plan properly so that you are protected in the case that payment is not made in full.

3. Letters of demand

If you have tried to reason with the debtor over the phone and have failed to arrange a payment, a letter of demand for payment within a specific timeframe can be an effective measure. It emphasises that you are considering legal proceedings and are providing one final opportunity for the debtor to comply with their obligations or at least talk to you about how and when they intend to pay you.

4. Hand it over to the experts

Sometimes it is better to have a circuit breaker between your business and its debtors. Chasing debts might be taking away your team’s time and energy that would be better spent chasing new business and profit. In that case, you can give us a call. We have experience in working with SMEs to collect outstanding debts. We have a fixed rate for the preparation of correspondence and discussions with your debtors as part of the last effort before legal proceedings are kicked off. We would be happy to talk to you about how we can work with your business to collect those outstanding debts.