Ageing debtors: the weekly 20-minute chase routine

Ageing debtors: the weekly 20-minute chase routine

Cash flow problems in small businesses are rarely caused by a lack of profit. They are caused by profit sitting in other people's bank accounts. The invoice was sent, the work was done, and the money arrives six weeks late because nobody chased it. The cure is not a harder personality. It is a routine: twenty minutes, every Friday, same time, no exceptions.

Why Friday, and why twenty minutes

Friday works because it stops invoices festering over the weekend and because finance departments process payments early in the following week. Twenty minutes works because it is short enough to actually happen. An hour-long monthly credit-control session gets postponed. A twenty-minute Friday habit survives. Put it in the calendar as a recurring appointment and treat it like a client meeting: it does not move.

Minutes one to five: read the aged debtor report

Open your aged debtor report, sorted by how overdue each invoice is. This one report tells you everything: who owes what, and for how long. If you cannot produce it in under a minute, your sales ledger needs attention before your debtors do. Scan for three things: invoices that have just gone overdue and need a first nudge, invoices in the 30 to 60 day bracket that need escalation, and anything over 60 days that needs a decision. Write the action next to each one. This is the whole planning phase, and it takes five minutes.

Minutes five to fifteen: work the escalation ladder

Chasing is a ladder, not a single shout. Every invoice climbs it one rung at a time. Rung one is the friendly reminder a few days after the due date: a short email with the invoice attached, assuming an oversight. Most late payments end here. Rung two, a week later, is the phone call. Calls work because they reach a person and surface the real reason: a dispute, a cash flow wobble, or your invoice sitting with the wrong approver. Rung three is the firm written reminder with a specific payment date, mentioning that statutory interest is now accruing. Rung four is pausing work or supply until the account is current. Send the emails, make the calls, and log every contact against the invoice. For businesses that want this handled consistently, Finex Outsourcing offers financial accounting outsourcing that keeps the sales ledger, the aged debtor report, and the chase routine running every week.

Minutes fifteen to twenty: fix the system, not just the symptom

Use the last five minutes to stop the same problems recurring. If an invoice went out late, find out why and fix the trigger. If payment terms were vague, tighten the template. If a client always pays late, move them onto direct debit, take deposits on future work, or shorten their terms. The routine chases today's debtors. This five-minute review stops next month's. Over a quarter, it is the most valuable part of the twenty minutes.

Make payment automatic wherever you can

The best chase is the one you never make. Move retainer clients onto direct debit. Take deposits before project work starts and schedule interim payments for longer jobs. Offer early-payment discounts only if the maths works: a 2 per cent discount for payment in 7 days costs you far more over a year than it looks. Every pound that arrives without a reminder is Friday afternoon time you get back, and a client base that mostly pays by direct debit barely needs a chase routine at all.

The discipline that makes it all work

The routine fails in exactly one way: exceptions. The big client gets a pass because you are afraid to chase them. The old friend gets a pass because it feels awkward. Then everyone gets a pass and the routine is theatre. Chase the big client first, politely and professionally. Finance departments at large companies respect a proper process more than they respect silence. And remember the final rung of the ladder: if a client will not pay, stop working for them. Continuing to deliver to a non-payer converts a late payment into a bad debt. Twenty minutes every Friday, the ladder climbed properly, and no exceptions. That is the entire system, and it works.

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