Simply said, Money Chasing is the personal act of following up on a businesses outstanding debt.
However, there is a more elaborate explanation. Money Chasing is part of the duties of an Accounts Receivable Administrator or Credit Controller in larger organisations and corporations.
A company’s AR team constantly evaluates the number of and the amount of outgoing invoices,
with the money coming in.
The Credit Controller also follows up on due and overdue outstanding invoices, negotiate payment plans, offer discounts and - if necessary - work with debt collectors and lawyers to retrieve those debts.
Money Chasing is a task that is usually done for an outstanding amount that just overdue or overdue for up to 6 months. The recovery rate during this timeframe is relatively high. Get in contact with your debtor and find out what the problem is. It is unnecessary to involve a debt collector just yet as their commission will be a high percentage of the total amount which has not yet become uncollectible.
Nowadays many accountant software (eg. MYOB) offer automations to send out reminder emails to your
debtors. The risk that the debtor doesn’t get the reminder and/or “cannot be bothered” at the moment is high.
This is where the personal approach of “Money Chasing” comes in place. An experienced Accounts Receivable would call your debtor and in an one on one conversation to find out it’s payment status.
So how does Money Chasing work?
- Review outstanding invoice for correctness (details, services, amount, invoice type etc.)
- Check if all all services / products have been delivered or if disputes have occured?
- Evaluate potential success of chasing and possible risk
- Create “gameplan” (approach, discount, payment plan, new due dates, etc.)
- Call & negotiation
- Documentation & communication of agreements (email, letter)
- If necessary follow ups
- Confirmation that payment is received and thank you message to client
- Success dance
If you follow this process you have a good chance of getting paid. However, if you don’t have the time to Chase Your Money or you just don’t feel like it, let us handle that for you. Book you chase at Hi, I’m Sally!
Tip: Leave your emotions outside the office when chasing your money, see it as what it is, a necessary conversation that is part of running a successful business.