As we head towards the new year, it’s time you look at your business’ financial health, and this includes taking stock of unpaid invoices and outstanding payments. You don’t want to start the new year struggling because a long list of debts is impacting cash flow. To reduce financial stress, improve cash flow and start the year off right, start debt recovery action early. It doesn’t matter if you’re a small business owner or you manage a much larger organisation, prioritising debt collection in the new year is a key part of safeguarding your finances in 2025.
How to Approach Early Debt Recovery Action in the New Year
There’s no point in letting an unpaid invoice spiral into an ongoing and outstanding debt, not when early debt recovery action in the new year can make debt collection a lot easier.
- Clearly Define Your Processes – When it comes to early debt recovery action in the new year, one of the best things you can do is to clearly define your debt recovery processes. You might occasionally send an email chasing payment, but that’s unlikely to be enough to convince debtors to pay up. With clearly defined debt recovery processes in place – for example, scheduling regular reviews of overdue payments and having letter templates to chase late payers – it’s a lot easier to keep on top of outstanding debts.
- Have Strict Payment Terms – It’s no use having a handful of lenient, flexible payment terms, as this doesn’t convey to people how important it is to pay on time. You need to have a set of strict payment terms to send to customers, including details on when they need to pay, how they can pay and what will happen if they pay late. Include information on how you’ll deal with overdue payments if they do occur.
- Prioritise Effective Communication – If you begin early debt recovery with effective communication, you’re off to a good start. Make sure you have up-to-date contact information for clients and communicate quickly, politely and professionally. The sooner you contact someone about an overdue payment, the sooner they’ll pay. Use a mix of communication channels – including letter, email and telephone calls – and don’t shy away from being persistent if you need to be.
- Familiarise Yourself with the Legalities of Debt Collection – It’s important to know the legalities of debt collection, especially if you’ve been chasing a debtor for a while. Often, the threat of taking a debtor to court is enough to make them pay what they owe, but you still need to know what legal routes you can take should your initial debt recovery effort fail. Remember, there are time limits for chasing a debt. You usually have six years from the date of the debt to secure a payment.
- Take Advantage of Expert Help – As debt recovery experts, we have the tools, techniques and experience needed to successfully recover debts. We’ll take early debt recovery action, doing everything we can to recover unpaid invoices and outstanding debts as quickly as possible.
Debt recovery is time consuming, so hand everything over to the professionals. Get in touch with our debt collection experts to find out more.
