Industry sector: Leisure

Pool hall: Cash from debtors


'Cash from debtors' means any income you receive from account customers that you send an invoice to, usually at the end of the month. After they have been sent an invoice but before they pay, they are your debtors. When they pay you, the payment is referred to as Cash from debtors.

As this is largely a cash business, it is not likely that you will have a significant amount of Cash from debtors. It is possible, however, that you may decide to offer account terms to corporate customers that hire your centre on a regular basis - for example for team building events - or to university clubs that use your centre for their regular sessions. Also, if you send out membership reminders by post or email, you may allow your members a certain period of time to pay their subscriptions after they have received the reminder.

Payment terms

If you do decide to offer account facilities, agree payment terms with your account customers so that there is no confusion as to when invoices should be settled. You might, for example, require all accounts to be settled every month, perhaps by a particular day of the month. Alternatively, you might state on your invoice that payment must be made within, say, 28 days of the invoice date.

Make an estimate of the amount of income you are likely to receive from account customers each month, including VAT. Enter the amount in your cash flow in the month in which the money is due to be received.

Consider what steps you will take to recover any overdue amounts and whether interest will be charged on these. You may decide to temporarily bar from playing in the club any members whose subscriptions are overdue.

Your business stationery

Have some invoices printed for your account customers. A good printer will be able to advise you on layout, style and even content. If you are registered for VAT you must include your VAT registration number on your invoices.

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