Small businesses are the lifeblood of the UK economy. SMEs constitute 99.9% of all private businesses in the UK and they employ 14.4 million people. With an annual turnover of £1.6 billion (18% of total turnover in the UK), their financial health impacts the whole economy. During the pandemic half of the UK’s SMEs took out some form of Covid-19 related loan, leaving them with an average additional debt of £173,000 each. And now small businesses need revenue to repay these loans. So how can they improve their own credit control and cash flow? Here are five top debt recovery tips for small business owners!
1. Don’t Sacrifice Customer Relations
Maintaining a customer relationship whilst pursuing debt can be a challenge. Fortunately today technology has revolutionised and improved debt collection efforts in a way that can build and strengthens your relationship with your customers. With advanced debt recovery software, SMEs can automate their invoices and arrears correspondence, which are always fully compliant, accurate and professional. Improved customer satisfaction and relations can help your SME grow.
2. Debt Recovery Software
Debt collection software and debt recovery software is the most powerful tool an SME can leverage in their pursuit of debt recovery. The software, powered by Artificial Intelligence (AI), takes the place of a collection agency, by automating payment reminders, sending invoices, and providing payment terms to your customers. The software seamlessly integrates with your accounting software, and the administrative solutions you already utilise. It leads to faster results, reduced operating costs, and improved customer relations.
3. Making Contact
Research shows that digital channels are the best way communicate with debtors. An omni-channel debt collection strategy involves texting, email, and chatting in order to get a debt paid to your SME. These digital communications can be automated via debt collection software tools. And these multiple touch point digital connections are not labour intensive, and they encourage proactive responses from your debtors.
4. Adopt a Single View of Debt
The most innovative SMEs are investing in ‘Single View of Debt’ technology; providing them with an holistic view of the total debt that an individual owes across many departments within one organisation. This 360 degree view of each customer provides an holistic understanding of each debtor, and can serve as the foundation for helping an individual pay the SME their total arrears.
5. Remember Compliance
Your pursuit of debt must always be reasonable and balanced. On May 4th 2021, the new Breathing Space and Mental Health Crisis Debt Respite Scheme will come into force, giving people the ability to take a pause on their debt payments and further penalties such as interest, fees and new enforcement action for 60 days. The Lateral solution provides a comprehensive toolkit to help your organisation optimise its debt recovery processes whilst remaining fully compliant with this new legislation at all times.
Lateral offers the most flexible and robust CRM and debt recovery software on the market. Our debt collection software boasts over 700 plugins which integrate with various diallers, SMS and letter sending companies so that everything is tracked. In addition, with our award-winning Decision Engine, Lateral is able to automate more tasks while creating more intelligent workflows. Get in touch today and try a free demo.