Keeping your debtor days down

Spotting the signs of trouble

• Have there been any delaying tactics, such as not answering calls?
• Have they asked for copy invoices?
• Are they trying to pay by cheque?
• Are they paying from a different account or personal account?
• Have there been changes in staff personnel?
• Can the “supply taps” be turned off?

What steps can we take?

• Share communications as a team.
• Understand the client’s sector.
• Be empathetic and compassionate to their situation.
• Ascertain whether your kindness is being taken advantage of.
• Monitor the credit levels you have granted to a client.
• Resolve any disputes promptly.

What has Menzies done to improve recoveries?

• Offer short-term payment plans.
• Prompt escalation of any issues where bad debt is apparent.
• Letter Before Action from a solicitor where necessary.
• Automate your processes for receiving your collectables.
• Use a payment portal.

How could credit controllers make their systems more efficient?

Automation has been the key ingredient for credit controllers in providing clients with the flexibility to pay.

At Menzies we use ECWID, which is essentially an e-commerce shop, similar to Shopify. Costs are around £18 per month.

We also use Stripe at Menzies for our card payments via the website but there are other providers. Costs for this service are approximately 20p per transaction plus a small percentage charge.

Insolvency landscape

As we head towards uncertainty in our economy, we are seeing more and more reminders of an inability to pay debts as they fall due.

Insolvencies are now above pre-pandemic levels. In January 2022, the conversion rate of petitions to Winding Up Orders stood at approximately 1 in 4. However, in February and March 2022, this ratio changed to 1 in 2.