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Effective Ways to Manage Debtors for SMEs in Asia

erasing debt, hand written word on blackboard being erased concept

Debt doesn’t have to be an ugly word. Some successful SMEs rely on debt but healthy SMEs should be cash rich. Chasing down debtors is stressful and strategies to manage debtors are a key aspect of growing your SME business in Asia.

It doesn’t matter how good your product or service may be, or how many customers you attract to your business, if nobody is paying your invoices you will soon run out of operating cash and find yourself in an unnecessarily difficult position.

The larger the company, the worse its accounts in terms of the ease with which they can be reconciled. This can lead to ‘phantom income’ which results in the real position of a business being far worse than it appears.

SMEs face a different challenge with debt as they depend on day-to-day cash flow to keep their heads above water. SMEs have less data to reconcile and so must be much more accurate in analysing their accounts.

 

Before We Get in to Debt

Here are some tips for your SME to avoid accumulating debt;

  • Avoiding debt, and in particular bad debt, can be a simple matter of conducting due diligence. Do regular credit checks on your customers either formally or through a social network, there is no point in selling to someone who can’t pay you
  • Agree payment terms up front. If your client intends taking 60 days, or even longer, to pay you should find out before starting the contract and then make a decision. Don’t be afraid to turn down bad business
  • Invoice promptly. Make sure you know exactly to whom and where to send your invoices and exactly what details they must contain. Raise invoices as soon as the work is done
  • Follow up, by telephoning or emailing shortly after you send your invoice and ask to process the invoice through your clients’ invoice payment systems. Even keep a recording of the conversation and make a mental note of payment performance
  • Be prepared to complain but remember to use your own personal charm and direct your communications at the appropriate level of management within your clients’ organisations
  • Many clients prefer or demand invoices electronically.  The world is turning digital nowadays. The key is choosing a system which is compatible with your customer’s system.

 

Make life Easy

A Sydney-based debt management fintech firm is entering the South East Asian market aiming to toughen up the region’s timid collections culture. ezyCollect is a provider of ‘software-as-a-service’ that automates the dispatch of overdue invoice reminders and accepts online payments. It is the only cloud-based debt management add-on to be recommended by ABSS. With more than 350,000 users of ABSS solutions, this partnership has already seen a significant number of new companies subscribe to ezyCollect’s​ software. ezyCollect has adapted its offering to the relatively passive approach to corporate debt recovery in Asia.

AJ Singh, one of the co-founders explains, “The average invoice from an Australian SME is paid in about 30 days, in many Asian countries the average is double that because there’s a concern about losing face if you ask your customers for money, especially if you have a personal relationship with them,” adding, “Automated reminders and scheduled phone calls might initially happen later then they would for ezyCollect clients. Part of the strategic goal is for outsourcing debt management to a “faceless” third party incentivizing more Asian SMEs to use it.”

ezyCollect has had to adapt for Asia as it is illegal to do a credit check in many Asian countries without the potential clients’ permission. Currently, SMEs using ezyCollect are automating on average 110 reminders each month, bringing a 60% reduction in staff time as well as improvements in working capital due to earlier payment of overdue invoices.

Debt Collection Made Easy

Chasing overdue invoices can take its toll on your mental wellbeing, waking up in the middle of the night worrying about paying your bills. ezyCollect eliminates the stress of chasing debtors and SMEs can use this to cut overdue debt by up to 50%.

ezyCollect allows you to automate your reminders with a mix of communications like emails and schedule real live-person phone calls resulting in improved cash flow and profitability for your business.

ezyCollect is a secure cloud based application that integrates with your accounting software. It determines which invoices are overdue, by how long, and then allows you to automate, schedule and distribute personalised communication reminders so you can get paid faster and with much less effort.

There are many additional features for ezyCollect;

  • Automated: ezyCollect automates your entire receivables management process. From the moment the invoice is sent, to the day you get paid
  • Integrated: ezyCollect syncs with your current invoicing application so you don’t have to enter any data manually
  • Personalised: ezyCollect personalises communication so that your customer is more than just a number

 

Easy Benefits

Add on ezyCollect to your existing ABSS solutions effortlessly and enjoy the benefits of user friendly debt management;

  • Automate your collections – Enter your overdue invoices in your automated reminder schedule and let ezyCollect send invoice reminders while you get on with your business
  • Track your cash – Track all debt collection activities in one place. With instant mapping, tracking of all money owed to and overdue in your SME is easy
  • Reach more customers faster – ezyCollect saves hours of time each week and reaches every overdue customer with persistent, polite reminders
  • Automate with care – Customise your reminder templates in ezyCollect and automatically thank customers when payment is received
  • Significantly boost cash flow – Get paid faster, mitigate bad debts and enjoy more cash to grow your business.
  • Improve employee efficiency – Add multiple users so your staff, accountant or credit controller can share tasks, reports and vital insights

Debt management is a necessary fact of SME business life. So why not make life ezy-er by adding on a process that runs itself. Take the hard work out of chasing payments and take the stress out of debt collection and management.

Click here and try it for FREE for 6 months

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