Businesses and accounting departments spend too much time chasing overdue debt when that time would be better spent advising their sales teams on who to do business with and not.
An online survey conducted by Debt register, a new digital payments platform, found that nearly one-third (32%) of all businesses spend up to three-quarters (between 51% and 75%) of their time chasing bad debts while ‘they could do something else, and almost a quarter (24%) spent even more (76% +).
Those who spent the most time chasing debt were teams working in the healthcare industry: 80% of companies surveyed, from pharmaceutical companies to healthcare providers, spent 51% or more of their time on the phone or on the phone. ‘sending e-mails to get money that is rightfully theirs. Manufacturers also struggled to get money: 44% spent more than 50% of their time looking for their money and more than a quarter (28%) spent much longer (76% +).
The most âefficientâ seem to be those in the service sector (accountants, consultants, etc.) where 43% spent less than 50% of their time on delinquencies, and among them, almost a quarter (23%) spent between 0 and 25%. % chasing money. Companies in the energy sector also appear to be less in difficulty; 60% spent less than 50% of their time on delinquencies
In the technology sector, exactly half spend half of their time or more (32% more than 50% and 18% more than 76%) on arrears, while a similar picture emerges in Banking and Finance (48 % spent more than half of their time chasing late payments).
The research is published in the context of new technologies and platforms now available that can automate the late payment process, dramatically improving cash flow without hogging a team’s time or having to resort to costly lawsuits ( and often unproductive).
Gary Brown, founder of Debt Register, says the numbers make it uncomfortable to read: âIn an ideal world, companies would follow up on invoices before they are due, not when they are already overdue,â he says. “There are several tools that can deal with late payments quickly and allow the credit manager to direct their businesses to businesses they should be doing business with, and away from those that present greater risk.”
Philip King, advisor and industry champion, agrees: âOf course the fundamental role of the credit manager is to maintain cash flow, but it also means working with the whole company to define. the appropriate credit terms with customers and agreeing who is / is. it is not a good risk. In these tough times, businesses will try to hold onto their cash flow longer, which is why having the right processes and tools in place to ensure a credit manager’s time is even more important. devoted to areas that require their particular skills.
Debt Register is above all a global payment accelerator that allows a credit manager to identify overdue invoices on his general ledger and allows the platform to do the rest. Debt Register contacts the debtor automatically and in the correct language, requesting payment to be settled and ensuring that the invoice is correct and not disputed. In lawsuits, the specially designed digital platform can resolve debts up to 10 times faster than traditional legal action, and at a fraction of the cost.
By leveraging its relationships with major credit reference agencies (CRAs) to report unpaid and overdue debts, debtors are encouraged to settle delinquencies promptly to prevent their credit scores from being adversely affected.
Debt Register is available worldwide and designed to be suitable for all businesses, regardless of their industry.