Managing your debtors is the key to your cashflow and ensuring your business can survive the ups and downs that naturally occur in any economy.

​Debtors management is not difficult but it requires business's to be vigilant and ensure that staff are following procedures.

​The key concepts of any debtors management policy will revolve around the following key points:

• where possible, always try and agree the price up front with your customer, this avoids any possible "bill shock";
• ensure that your customer is aware of your debtors policy or have them sign an engagement document that clearly states your debtors policy;
• before offering new customers payment terms, trial them on a cash-up-front basis for a few purchases or relatively short terms such as 7 days payment.  This gives you the opportunity to test their credit worthiness before offering them a larger account of longer payment terms;
  
• ​ensure that invoices are sent out promptly, preferably as soon as the service or good is supplied;
• offer customers numerous ways to pay - direct debit, credit card, Paypal etc
• once a debt become due have a policy for how it is followed up - many cloud based accounting programs or add-on apps can automate this process for you by sending out reminder emails, statements etc;
• one of the least enjoyable areas of managing your business is debt collection, but where debts become overdue and statements and reminder emails have not worked, it will require a staff member to follow up with a phone call to the customer;
  
• a lot of businesses are doing it tough, particularly outside of our capital cities, so payment arrangements are becoming more common - however as soon as a customer defaults on the payment arrangement be strict with them about the terms to repay the balance of the debt and ensure that future sales are paid in full up-front;
• where a customer has received a certain amount of friendly reminders (2 or 3 should be more than sufficient) and they are avoiding communicating with you then don't hesitate to engage a debt collection agency or solicitor to chase up the debt or if under $25,000 you can make a claim through the Queensland Civil and Administrative Tribunal;
• unfortunately bankruptcy and insolvency are rising problems, if this occurs then it is important that your debt is registered with the liquidator for any possible payment.  It may also require you to communicate with your creditors and setup payment arrangements to assist your cashflow;
  
• finally, where a new or even regular customer is starting to become one of your key customers, spend a few dollars with a credit agency to check their credit rating before offering them payment terms.
  

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​These are just a few key points of any debtor policy.  The important thing though is to ensure that your policy is documented, staff and customers are aware of the policy and you strictly adhere to it.

​If you need any assistance in documenting a debtors policy for your business then don't hesitate to contact FinBiz Solutions for futher information.

​Always remember - cashflow is the lifeblood of your business.

Cloud computing is not right for everyone, but everyone should at least investigate the plethora of cloud based options available before dismissing it. 

Firstly, ‘cloud’ is a metaphor for the internet and ‘cloud computing’ simply means storing and accessing your data and programs over the internet instead of on your computers hard drive.

The benefits of being able to access your data and programs over the internet are obvious in that the only limitation on where or when you work is having reliable internet access.  This problem is quickly being eroded however with the growing amount of data being offered by phone companies in their mobile plans at much more reasonable rates than even 12 months ago.  So as long as you have a mobile phone you potentially have fast access to the internet by using your phone’s hotspot.

No longer having to worry about installing an update to your programs can be significant, as well as the cost of installing new software which in the past was a significant portion of any budget.  Most cloud based programs offer monthly packages for which the number of users can be increased as your business grows.  This also makes the cost of changing software no longer a barrier to improving your businesses efficiency if better products are launched on the marketplace. 

Training staff which would often involve getting a specialist to come to your office or sending staff away to get trained can now be handled via webinars and online training.

With the rollout of the NBN the number of businesses utilising the cloud to access their data and programs is likely to increase exponentially.  However, there will still be a number of places in Australia (particularly rural Australia) who will not have access to the NBN for a number of years to come or possibly ever.

For any business its important to test how reliable and fast your internet is with a free trial version of any cloud based program before you jump in and switch everything across to the cloud.  Its also important to know how secure your data is on the ‘cloud’.  Companies like Microsoft, MYOB and Xero spend millions ensuring your data is stored on secured servers located throughout Australia and the world, however for every Microsoft, there are other companies offering similar services whose data servers may not be as secure.

While you may be concerned about storing your data on the ‘cloud’, it can often be the case that the ‘cloud’ is a lot more secure than your hard drive, particularly if your computer is connected to the internet.  How often have you heard people complain about being caught out with a ‘virus’ they inadvertently opened on their home computer and they lost everything.  If you don’t have appropriate security and backups in your business this can happen to anyone.  If your data is stored in the cloud this should not be a problem because even if your computer dies, you can simply replace that computer and log on to the ‘cloud’ to access your data.

Most people already use the ‘cloud’ possibly without even knowing it.  Most mobile phones will backup your mail, contacts, calendar and more to the ‘cloud’ and nearly everyone has an email application hosted on the internet – think Gmail, Hotmail, Bigpond etc.

The biggest argument against the ‘cloud’ is the possibility of not having internet access for an extended period of time or the cloud program suffering an outage (although these are usually limited to just hours for any major players).
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Whatever you do, don’t rule out using some or all cloud based computing options for your business without first investigating if the ‘cloud’ is truly an option for your business.  If you do, you could be costing your business thousands of dollars in potential savings, which in this economy can be the difference between success and failure.
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