The notion of a late payment problem for businesses is as old as business itself. From the early days, getting paid has been one of the cornerstones of successful businesses all over the world. The late payment problem continues to cause issues for businesses of all size and stature, but often worst impacting small businesses, contractors and SMEs.
As Christmas approaches it is all the more important to get on top of late payment problem, before the long break when very few companies open for 2-3 weeks around the festive period.
Late Payment Problem
So this month we have put together a brief 5-step checklist for identifying, avoiding and dealing with a late payment problem:
- Invoice your customer as soon as the work is finished, that way if there are any disputes or queries, these can be resolved quicker and this won’t turn into a late payment problem
- Watch out for delaying tactics when asking the customer to pay, excuses such as: cheque in the post, accounts staff on holiday, signatory not in to sign the cheque, its on the next payment run etc
- Do a credit search on the company you are doing business with, if a Director has multiple companies set-up this could mean they are serial non-payers and should be avoided
- Call your customers as well as sending letters – debtors feel a sense of guilt when they receive a call & therefore are more likely to pay you, and letters can easily be ignored
- Follow-up with email reminders with a copy of the invoice because you have proof these were sent and can even quote the time of day – the no.1 reason for late payment is not receiving a copy of the invoice!
Our advice is always to pre-empt the late payment problem as much as possible, chasing and escalation to 3rd party or legal process are the 2 most important things you can do to mitigate late payment problems in your business.
If late payment is an issue in your business, call us today on 0800 069 8777 to see how we can help, or email firstname.lastname@example.org