7 ways to reduce debtor days #7 Payment Methods


One of the main ways to encourage a customer to pay invoices on time is to make it as easy as possible to make a payment. Small businesses are often left waiting for payment for an average of 21 days, which has the potential to cause huge financial problems. As debtor days mount, the likelihood of a business not being paid by customers grows.

Once you have supplied goods or a service, issue the invoice as quickly as possible, as research has indicated that you are more likely to be paid if this happens. However, making it easy to pay will also help to speed up the process.

Credit card payments

Accepting credit card payments will mean that you can take payment from customers anywhere in the world. If a customer is experiencing financial difficulties, they are more likely to use their credit card to pay their invoice. You can accept credit card payments face to face, by phone or online, so you can always be paid.

Debit card payments

A debit card works in much the same way as a credit card, although funds must be available to permit payment.

Why accept card payments?

A card is a flexible and convenient way to pay bills, reducing the requirement for cash. Online, telephone and face-to-face transactions can all be made using a card. It is a quick and secure method of payment, which makes it easier for all concerned.

Setting up card payments

To be able to process card payments, a merchant account will have to be set up with your bank. You will need to provide details about your business before being able to open a merchant account, but you don’t have to open it with your business bank, so do some research on the most competitive.


PayPal is becoming increasingly popular, providing a low cost, secure and fast payment method. Customers can pay using PayPal, knowing that their payment will be transferred to the supplier securely. Your customer can use any method to pay an invoice through PayPal, with no cost to them.

Direct debit and standing orders

For customers who regularly order from you, a direct debit could be set up so that the same amount can be deducted each month. This would help the customer to budget, while providing you with a regular, agreed monthly payment. Standing orders can be used if the payment is the same each month. The payment can be arranged to come out of the customer’s bank account on the same date every month.

Financial outsourcing services are a cost effective way to ensure that debtor days are kept to a minimum. If you want to know how providing more ways to pay will affect your cashflow, use our cashflow improvement calculator.