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STEP 1
Make sure you get paid
Sharon Baker FCCA
MD and chief innovator at Kinder Digital Accountants kinderaccountants.co.uk
“Making sure you get paid is becoming a bigger challenge than ever, and it’s vital that you stay in control of the process. Late payment and non-payment can give business owners many sleepless nights, while possibly leaving you unable to pay your staff, your suppliers and yourself. “Before granting credit to new customers, carry out credit checks and ask for credit references. Agree terms and get customers to sign a credit agreement, because it can help you to avoid payment problems. Ask for advance payments for high-value sales or longer-term contracts. “Send your invoices as soon as you can, after ensuring there are no issues with the products or services that you’ve supplied. Using software to produce and track your invoices can save you a lot of time and effort, by keeping the process well-organised. Make it as easy as possible for your customers to pay you, for example, by linking payment services to your online invoices. “Having to chase payment is never fun, but it’s vital. You’ve provided the goods or services and now you need to get paid. Don’t wait until the payment is days, weeks or even months overdue. Send reminders to customers shortly before payment is due. Software can make this much easier and more organised.
Sharon Baker FCCA
“If your customer doesn’t contact you to explain the reasons for the delay in payment and when they’ll pay, subsequent payment reminders should get increasingly stronger. Emails are easy to ignore, so, pick up the phone and call late-paying customers.
of business owners believe making sure you get paid is a key piece of advice for someone starting a business.
“Find out what the issue is. They may have innocently misplaced your invoice. Send it again. If they can’t pay because they’re waiting for their own customer payments, agree more time to pay, but don’t be too generous. You might agree to payment in instalments.
“If a customer hasn’t paid and things have dragged on for long enough, let them and your team know that no further products or services will be supplied until the unpaid invoice is paid in full.
“Although there are costs, invoice finance can provide a cash-flow solution. If late payment turns into bad debt and you don’t have the time to take your client to small claims court, you could contact a debt-collection agency. Minus costs, it could lead to you finally getting your money.”