Sadly, in the UK we seem stuck in a business culture where late payments have become expected. Small businesses are often the worst affected and some industries such as construction and business support services seem to suffer more than others.
One late payment might not seem like a big deal but the cumulative impact of multiple late payments can be catastrophic for businesses, particularly small businesses, start-ups and SMEs.
There is no one fool proof way to ensure you get paid on time but there are various steps you can take to try and avoid late payments.
- Agree payment terms in advance and ensure everyone is aware of your terms.
- Invoice promptly. As soon as you provide products or services send out your invoice, this is the most important single thing you can do! If you struggle to get invoices out then look at your systems or consider outsourcing your invoicing.
- Make paying you easy. Allow customers to make payments via the method that best suits them.
- Send reminders and chase late payments straight away. Don’t be afraid to pick up the phone and ask about an overdue payment. If you don’t have the time or are uncomfortable with chasing payments then outsource the task. The worst thing you can do is ignore overdue payments. Zodeq can help with credit control.
- Credit check your clients.
You could also consider some other more creative tactics to guard against late payments. Some organisations charge late payment penalties. This might be the norm in some industries, in others you might find it is unheard of and it could be damaging to your brand and reputation. Alternatively offering a discount for prompt payment can be effective.
If late payments are proving problematic for your business then get in touch. We can help with our credit control service. Outsourcing credit control can be the perfect solution, it saves you valuable time and can be extremely effective, helping ensure that debts don’t escalate.