Nearly every agency owner has struggled through times of uncertainty where cashflow has been an issue.

There are lots of reasons that can cause a business to run out of cash: losing clients unexpectedly, taking on new employees to support growth (then not hitting your sales targets) or even broader economic factors like a recession.

The stress that comes from not knowing if there will be enough cash in the bank to pay wages is something that every business owner wants to avoid. A huge part of this is ensuring your sales invoices are paid in a timely manner. This is a challenging process, but there are things you can do to make this process more efficient for both your business and your clients. 

Now, before we start comparing Chaser to Xero – there are a couple of key factors to consider first when chasing payments. 

Be proactive and organise your trade debtors 

When cashflow is looking tight and you’re starting to look around for how to cut costs or raise funds, don’t overlook your trade debtors balance. It’s one of the best sources of cash you can tap into. Your trade debtors are the invoices you’ve sent to clients which haven’t yet been paid.

As Xero says: 

‘Trade debtors are invoices owed to you by customers. They’re also sometimes called debtors or accounts receivable. Trade debtors may additionally refer to those customers who owe you money.’

Reducing the size of your trade debtor balance (by getting paid faster) is one of the easiest, fastest and cost effective ways of improving your agencies cash position. 

Read some more top tips about how to get paid faster in our blog ‘How to get paid faster’. 

Be on top of your credit control process

A good way to tackle an overgrown trade debtors balance is to get on top of your credit control. Good credit control is as simple as monitoring who owes you money and promptly asking to be paid when invoices have gone overdue.

Traditionally this would mean calling clients yourself or employing a credit controller to chase unpaid invoices. However, there are now ways to use technology to automate this process for you! 

Use technology to your advantage

There are some great tech tools out there to streamline your credit control process and even chase unpaid invoices while you sleep.

The two main tools we recommend to clients are Chaser and Xero. 

Both Chaser and Xero can be used to send automated payment reminders to your clients. This means that rather than you spending hours emailing and calling clients, they will do it for you. 

Which great platform should you use to chase unpaid sales invoices though? We’re here to compare and contrast both tools so you can decide what works best for you and your team. 

Xero

Xero is a cloud accounting software that keeps track of, and reports on, your finances and taxes. It has some great features which are designed to help you run your business. One of these features is automated invoice chasing.

Benefits to using Xero

• As you’re (hopefully) already using Xero for your accounting records, the invoice chasing feature is free.
• It is simple to activate invoice chasing in Xero – just a couple of steps and you are there – no training or set up time is required.
• As your team will already be familiar with Xero it won’t be a big learning curve for them to start using automated invoice chasing.

Challenges with using Xero

• All the emails come from one email address. Whilst you can choose what this address is, it does mean that there is no built in escalation process.
• Back and forth conversations with clients are not captured in Xero. If multiple people in your team need to be in the loop, you’ll need to make sure this information is shared adequately outside of Xero.
• Invoices are chased individually so if a client is overdue on a number of invoices, they’ll receive multiple chasers.
• It’s not possible to choose the timing of your chasers. You’ll need to be extra careful that your bookkeeping is up to date. Check out our article for tips for keeping your books up-to-date.

Chaser

Chaser is cloud credit control software that helps businesses carry out effective credit control efficiently but automating much of the process.

Benefits to using Chaser

• The emails reflect your regular email address and signature so it feels like they’ve been sent by a human.
• You can choose which email address the chasers come from. You can also set an escalation process so each reminder progressively comes from someone more senior in your organisation.
• Where there is more than one unpaid invoice, they are automatically grouped and chased in one email, just as you would if you were chasing manually.
• You can set up the timing so that the chasers are sent at a time when you know your bookkeeping will be up-to-date.
• Replies to email chasers from clients are visible in Chaser so it’s easy to keep track of what conversations have already happened between your team and clients.
• It’s easy to collaborate with your accountant on credit control or even to fully outsource it to them. This is because they’ll have full visibility of all correspondence with your clients about unpaid invoices.

Challenges with using Chaser

• As Chaser is an add-on to Xero, it comes with a price. We think this is very affordable given the time and stress it will save you. At the time of writing the price is £29 per month for their starter package.
• Your team will need training on how to use Chaser. It’s not complex but it is more involved than Xero’s automated chasing.
• It takes a little more time to set up Chaser than it does Xero’s automated invoicing. We’d recommend that you work with an expert to do the set up for you.

In conclusion

Whichever system you go with, Xero or Chaser, you will see an improvement in the speed in which you get paid. The decision around which system to use to chase unpaid invoices needs to be based on what is right for your business. Factors that will influence this will be your budget,  your business priorities and your existing way of working.

Interested in finding out more?

We’ve had huge success in helping our clients get overdue invoices paid using both Xero and Chaser. Get in touch if you would like to learn more.