The Easy way to chase unpaid invoices
Unpaid invoices are a thorn in any company’s side. It is a frustrating and stressful process chasing payments not to mention time-consuming! But did you know you can outsource this process and have Debtor Daddy do all the hard work on your behalf?
Learn how outsourcing your debt collection will improve how quickly your business gets paid, boosting your cash flow and allowing you to concentrate on doing what you do best.
Watch the full replay of this tech talk below.
What is Debtor Daddy? [0:07:00s]
Debtor Daddy provides outsourcing services for data management, debt chasing, and bill chasing. They help take away admin burdens from business owners who don’t have the time or interest in chasing payments. Their service allows business owners to focus on what they do best while leaving the admin work to them.
Starting a Business: Lessons Learned [0:9:38s]
Matt understands firsthand the challenges of running a business while trying to create a good life for his family. He started his own web design company in 2007 with no money and faced many challenges when running it, learning by trial and error, trying marketing and hiring people. Access to capital is challenging for small businesses, especially in the early days. Many find it easier to borrow more money than build good habits and processes in your business but using credit cards for funding can lead to high-interest debt. Chasing debtors is important but often goes to the bottom of the list because tradies don’t have time or just don’t enjoy chasing up late payments. Staying on top of your booking keeping with quick invoicing and payment can make a massive difference in cash flow for growth in your business.
Outsourcing for Business [0:15:01s]
Running a business can be hard, having the right people around you to guide and educate you on things that may not be efficient or practical to learn yourself can make a massive difference in business. Strategic outsourcing can be a good way to construct a business by focusing on what you do best and outsourcing other areas. Matt sold his previous business due to lack of access to capital for growth. He soon realised that many businesses struggle with the same issue of debt collection which is what inspired him to start Debtor Daddy.
One of the things that we loved about Debtor Daddy was that it took that phone call out of the process for us because our business is time poor , the accounts manager didn't really like chasing debts, didn't like jumping on the phone and calling people and having that awkward phone call and that's not a good use of of her skills so Debtor Daddy was great because you've got team that's specialised in that.
Solving Debt Collection Problems with Automation [0:18:03s]
Many businesses lack a predefined process for managing credit offered to customers. Debtor Daddy’s software automates debt collection processes using a combination of emails, calls and debt collection. Many accounting software and Job management software offer automated reminders but they can feel impersonal and their effectiveness wears off over time. Crafting an approach that works for customers is important to improve the entire customer experience so they don’t feel bombarded. Debtor Daddy offers a three prong approach which includes a human touch, helping your customers stay as customers but also getting your business paid what it is owed. Debtor Daddy works with many cloud-based products such as Xero, QuickBooks Online, and MYOB.
Building a Process for Debt Collection [0:22:13s]
Building a escalation process for debt collection can really benefit businesses. Usually a friendly automated reminder is often enough to prompt payment but if that doesn’t work you should have a process in place, helping staff know when to escalate from automated reminders to phone calls. Using specialised teams like Debtor Daddy can take the awkwardness out of chasing debts if your team struggle with this task. People often think that Debtor Daddy will be scary or go heavy on them when making calls on behalf of businesses. The team at Debtor Daddy is committed to providing excellent customer service by using a crafted response around what they want to say and how they approach clients.
Client Communication [0:25:30s]
Breakdowns in projects or financial relationships can be resolved through effective communication. Communicating about what’s going on and where you are currently positioned is crucial to a healthy relationship moving forwards. Admitting to having a situation and communicating about it can lead to finding solutions that work for both parties. It’s important to give the benefit of doubt initially but also be aware that some customers may have their own cash flow problems. Email automation doesn’t allow for back-and-forth communication, which is essential in resolving issues related to cash flow problems. The personal touch provided by phone calls allows for quicker resolution and helps maintain good relationships with customers. After two or three calls, the Debtor Daddy team will know whether a person is evasive or genuinely facing cash flow issues.
Communication is such a massive thing and that's what the email automation doesn't give, it doesn't allow that back and forth to say what's going on, can we help, is there anything that we can do? How can we how can we get around this?
Debtor Daddy Vs Accounting Software reminders [0:27:31s]
Debtor Daddy has a more extensive reminder system than accounting software providers. The service was built based on customer feedback and includes features such as call services and debt collection links. Debtor Daddy’s reminder system includes a personal touch through phone calls made as part of the customer’s brand which allows for quicker resolution and helps maintain good relationships with your customers.
Debt Collection Process [0:30:34s]
Having a solid debt collection process in place will make sure your tradie business is not unfairly bearing the cost of customers who refuse to pay. In the trade space, it is important for businesses offering credit to have an option for debt collection. It is important to justify chasing debts and not let them go just because customers are being difficult. A good partner in debt collection can give your business confidence to take legal action against non-paying customers if it comes to that. The stop work rule is the best leverage that businesses have when dealing with overdue payments. Mindset plays a big role in implementing stop work rule but remember, if there’s a risk of not getting paid for your work, there’s no point in doing the job in the first place.
When to call a debt collector [0:35:19s]
It is recommended to call in a debt collector sooner rather than later. Waiting too long can result in other people chasing the customer for money or the customer disappearing. If you have followed your process and your terms of business support this, there is no reason why you couldn’t start debt collection in 60 days. Have a conversation with either a debt collector or someone knowledgeable about the strategy that works best for your business. Debtor Daddy provides coaching services to their clients, offering guidance on best practices and recommended structures for debt collection
It comes down to really being prepared, going in with good terms and setting solid foundations when you strike the deal and the other key takeaway is something we're coaching our clients on, the stop work rule. How overdue does something have to get before you will actually go nope and put down the tools and not go to work on your job? That is the best leverage that you have.
Developing a process for managing debtors [0:38:54s]
Dictating payment terms to clients is important to ensure timely payment and reduce administrative work later on. Analysis around invoice timing should be done, including looking at whether invoices are created daily or at specific times of the month. Communicating the process with clients and having consistency with payment terms from the outset plays a big role in its success. Customising processes based on client type is crucial, understanding how customers operate will help you configure things in your business to match their behaviour.
Debtor Daddy’s software allows users to create an unlimited number of sequences of reminders tailored to specific groups. You can view all overdue invoices in a common view in the app and choose whether reminders are sent manually or changed to a different sequence. There are a variety of reminder tones to choose from including casual and friendly approaches. Unpaid invoices can be moved to a calling service for automatic follow-up and the receivable specialists leave comments about each call in the history section for your reference. If payment isn’t received after three calls, the debt may be passed on to a debt collector to chase.
Invoicing vs upfront payments [0:55:03s]
Having a process in place for regular invoicing keeps cash flow going and avoids sending clients a large invoice after months of work. Making progress payments along the way is a great method to make invoicing easier and is better for cash flow. Having payment on completion as parts of your terms of service will allow you to get paid on the spot and eliminate any of the downtime wasted chasing invoice payment afterwards.
Using the Debtor Daddy App [0:57:28s]
When using Data Daddy to manage your business, you will receive email notifications when our team makes calls on your behalf. You can jump into the app to see anything that’s waiting for you to respond to, or add notes and comments for the team. You can view all scheduled reminders to check what stage payments are at and access live chat and phone support in the app. If Debtor Daddy doesn’t secure your payment, there’s no fee for the debt collection services provided.
Invoicing on a regular basis so you keep that cash flow going and so you're not smashing the client with a great big invoice you know after six months worth of work. Making those progress claims along the way makes it so much easier and so much better for cash flow so it comes comes back to that mindset and that business process.
MEET THE SPEAKERS
Matt helps businesses leverage tech + exceptional humans to get their invoices paid quicker without wrecking customer relationships. Debtor Daddy offers a better way that will save you hours each week, reduce stress and increase cashflow, so you can get back to doing what you love.
Clinton is driven by a passion to help the construction and field services industries evolve through the use of technology and education.
