As firms step into 2025, many are still grappling with unpaid invoices and outstanding debts carried over from 2024. These lingering financial burdens can disrupt cash flow, hinder growth, and create operational stress. FeeSynergy understands the challenges associated with recovering overdue payments and is here to provide practical solutions to help your firm regain financial stability.
Step 1: Assess the Scale of Outstanding Debt
The first step in addressing overdue payments is to thoroughly evaluate the extent of the problem. Analyse your accounts receivable to identify:
- The total value of outstanding debts.
- The aging of each debt (e.g., 30, 60, 90+ days overdue).
- Trends or patterns in client payment behaviors.
It’s important to note that older debt, particularly those exceeding 90 days, is significantly harder to recover. The longer an invoice remains unpaid, the lower the likelihood of successful recovery. Prioritise these debts and take immediate action to address them.
Step 2: Implement Clear and Consistent Communication
Open and professional communication is key to recovering outstanding debts. Consider the following approaches:
- Reminder Emails: Send timely and automated reminders to clients with overdue invoices. Platforms like FeeSynergy Collect can streamline this process.
- Personalised Follow-Ups: For high-value debts, a phone call or personalised email may be more effective than generic reminders.
- Payment Plans: Offer flexible payment options to clients who may be facing financial difficulties, ensuring partial recovery while maintaining client relationships.
Step 3: Review Client Credit Scores and History
The beginning of a new year is an excellent time to review the credit scores and payment history of your clients. Evaluate whether there have been changes in their financial behaviour or creditworthiness that could impact future transactions. By identifying clients with deteriorating credit profiles, you can take proactive steps to mitigate risk.
Step 4: Leverage Technology for Debt Management
Modern solutions like FeeSynergy Collect can transform your approach to debt recovery. This comprehensive platform offers:
- Automated reminders to reduce manual follow-ups.
- Online payment options with competitive transaction fees.
- Direct debit capabilities to ensure consistent payment collection.
- Fee finance options, allowing clients to pay in manageable installments.
By integrating these tools, firms can significantly reduce the time and effort spent on chasing payments.
Step 5: Strengthen Payment Policies
Preventing future debt starts with clear and enforceable payment policies. Review and update your terms to include:
- Payment terms (e.g. 14 days from invoice date).
- Upfront deposits for large or long-term projects.
- Monthly direct debit payments.
- Penalties for late payments including recovery of legal fees.
Ensure these terms are clearly communicated in engagement letters and client agreements.
Step 6: Monitor and Mitigate Risks
Risk mitigation is essential for long-term financial stability. Regularly assess your firm’s exposure to potential bad debts and take steps to minimise it. This includes:
- Diversifying your client base to reduce dependency on a few high-value accounts.
- Using tools like FeeSynergy’s insights to identify risky clients based on credit scores and payment behaviours.
- Implementing stricter credit checks for new clients to avoid future payment issues.
Step 7: Monitor and Measure Progress
Tracking recovery efforts is essential for refining your strategy. Use tools like FeeSynergy’s dashboard to monitor:
- The percentage of debts recovered.
- The average time taken to recover payments.
- The impact of payment reminders and follow-ups.
These insights enable firms to adjust their approach and achieve better results over time.
Step 8: Engage Professional Support
In some cases, recovering debt may require external expertise. FeeSynergy’s team provides tailored solutions to help firms recover outstanding payments efficiently and professionally. From automated processes to personalized support, we ensure your firm has the resources needed to succeed.
Achieve Financial Recovery in 2025
Recovering outstanding debt from 2024 is not just about closing old accounts—it’s about setting your firm up for a stronger financial future. By adopting strategic measures, leveraging advanced tools, and refining your payment policies, you can overcome cash flow challenges and focus on growth.
Contact FeeSynergy today to learn more about how our solutions can support your debt recovery efforts and drive financial stability in 2025.
