Getting paid: 10 tips for ensuring hassle-free payments
Late payments to small businesses can rack up, leaving them out of pocket and having to chase customers for overdue invoices. So that you’re not left in a sticky situation with one of your customers, and receive payment for your service quickly and conveniently, check out our tips below.
Know your customers
Save time and money by making credit checks on new customers, and carry out research into their reputation as well as other suppliers and clients they’ve worked with in the past.
Be clear about terms
Make sure payment terms are clear and feature on every invoice you send. Try to keep payment rules consistent for all your clients – it’s fairer and simpler this way – and consider discounts for early payment.
Don’t do cheques
For your convenience, encourage customers to pay using cash, electronic transfer or direct debit.
The right stuff
Choose your credit control people wisely – look for personalities who are firm but polite, resilient, and well organised.
Make the call
For unusually large invoices, call your client before the payment is due. This will ensure you resolve any queries or problems in advance.
Cut to the chase
Once a payment is due, chase it. Gently and politely remind your customer, giving them a few days to a week to pay before reminding them again, this time a little more firmly.
Exercise your legal right to claim interest on late payments at 8% over the Bank of England base rate. You should also claim compensation for any debt recovery costs, and warn late payers that you will take legal action, including winding up orders.
With large outstanding payments, be prepared to offer flexible payment terms. Your best chance of getting paid may be to accept regular instalments.
If you haven’t been paid for goods or services you’ve already supplied, stop any further supplies to the customer until payment is settled.
As a last resort, use a debt recovery agency to collect your money – but make sure you check the costs and are clear about what the agency will achieve upfront.
By: David Prosser