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Revealed: The best way to avoid losing money to your debtors

by , 27 October 2014
If you give your clients credit, you must have ways to ensure they don't walk off without paying you. After all, if you give them money, goods or services without collecting the money, what's stopping them from disappearing?

Thankfully, you can stop this with effective controls. But not just any controls.

There's one specific debtor control you should always have in place to ensure your debtors don't vanish with your money...

 

Use this debtor control to ensure you get money from your debtors

 
The best way to prevent losing money because of your debtors is to implement system level controls. 
These controls work to ensure you can track who's paid you and who hasn't so your debtors can't just vanish.
 
Here's how system level controls will help you ensure your debtors pay.
 
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This is why system level controls will help you get the money your debtors owe you

 
System generated bank reconciliations will help to identify money you receive. You can also trace its movements in case someone transfers the money elsewhere so you can see where it goes. This way, if your debtor makes a 'fake payment' and recall it you'll know. 
 
You should also use your bank reports. These help you identify debtors who usually pay on time. If you don't get a payment from them that month, there may be a problem and you'll know to follow up with them. 
 
The more controls you have in place to manage your debtors, the less likely they are to just disappear with your money. 
 
Implement system level debtor controls today to ensure your debtors pay up so your company doesn't land up footing the bill.
 
Check out the Practical Accountancy Loose Leaf Service for more debtor controls you can put in place in your company.
 

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