Cash Is King

No matter how much money your business earns or how much profit you make, if you don’t get paid on time then your bank account will soon be overdrawn. Being owed a small fortune is of no help when your bills need paying today. So, what can you do to ensure that your customers pay you on time?

Improve the way you invoice

Make sure that you invoice your customers as soon as possible. It’s surprising how many small businesses wait until they need money before they send out their invoices.The sooner your send your invoice the sooner you will receive your money.

A couple of days after the invoice is sent give your customer a friendly phone call to ensure that they received the invoice and that they are aware of when the payment is due. There’s nothing worse than chasing payment for an invoice 28 days after it’s issued only to be told (truthfully or otherwise) that it wasn’t received.

Dealing with bad payers and late payments

Make sure you are aware of all unpaid invoices and know as soon as they become overdue. User friendly bookkeeping programs will warn you as soon as an invoice becomes overdue and provide template reminder letters. In general there are three letters of increasing severity – starting with a friendly reminder through to a formal Final Notice of Demand.

If you let your customers give you the run around you are unlikely to get paid from them on time in the future. Be assertive about collecting what’s owed to you, after all it is your money. Make notes of what is agreed and stick to it.

If you still don’t get paid after sending reminder letters and the customer is avoiding paying what they owe without a valid reason then don’t ignore it, speak to a reputable debt collection agency.