Advice On Dealing With Late Payments.
One of the pitfalls of business is dealing with late payments. It is not a pleasant aspect of the job. Those payments keep your business running, so it is vital that the clients pay and pay on time wherever possible. Late payments can severely impact your ability to run your business. It can mean the difference between being able to pay your employees and having to let them go because you can’t pay their salaries. There are some ways in which you can reduce your late payment problems.
Know Your Customers
This does not mean know them on a personal level. There is a documented fact that friends often expect to be able to get away with late payments because they expect you to be more understanding of certain things that can impact their payment schedule. Admittedly, friends can also make great clients and never default on a payment. Know your client means building a good business relationship with them beyond an invoice order. Having that relationship can help remind them that you exist. Knowing your client can also mean that you will have a good idea of how they have integrated with similar businesses in the past and this will mean that you will have an idea of how likely it is that they will miss a payment. (source).
Agree on Payment Terms In Advance
You need to know when money is coming into your business so that you can make plans on what to do with it. If you know when money is going to come in, you will know when you can pay bills. You need to remember that some companies have very long payment schedules, this can be sidetracked through the use of payment discounts if the client pays early. Some clients will not be satisfied and demand a rebate. These are just aspects of the business that you need to plan for and have contingencies ready. (source).
Invoicing Promptly and Correctly
This means that you need to be organised. If a client never receives an invoice, they cannot be blamed for late payment. The simple fact of the matter is that the sooner an invoice is sent after the product/service is delivered, then the sooner you can request payment for the services rendered. You need a simple invoicing system that means that the quotes and invoices match and any additional fees are noted on the invoice. Everything that costs money and was discussed what the client requires has to be on the invoice so that they have a clear understanding of what they are paying for and why they are paying for it. Inaccurate invoicing can lead to the client refusing to pay the bill. (source).
When To Chase Payment
Immediately. If a payment is late, get on it straight away. Don’t be too heavy-handed in asking, not yet. It may be an honest mistake and an instant demand for payment then and there could backfire. If it is a few days late, send an inquiry and slowly build up the urgency. It can be a delicate process because of the need to maintain a relationship with the company. Don’t go over your contacts head unless necessary.
These are only a few tips when it comes to chasing late payments. It can often be an innocent mistake and it is important not to burn the contact too soon. Only when it seems like there is no way that the client will pay, is when you need to go over their heads or seek legal action. Silver Insolvency Solutions can help when it comes to debt management and understanding the process when it comes to late payments. We can help you in this area. To find out more, visit our website on https://www.silverinsolvencysolutions.co.uk, email us on email@example.com or give us a call on 0303 961 7169.