It always amazes me how often business owners forget about something so simple that can make a big difference to their cashflow.
Because getting paid doesn’t start once you’ve sent the invoice. It starts long before then.
….Before you even accept the customer.
So before you take on a new customer, make sure you’ve run a credit check and some background research. The bigger the sale, the more checks you need to do.
Not happy with the result? Ask for payment up front. Explain why. They’re a new customer and you always take payment up front with the first order.
Give them a great guarantee if you don’t deliver – money back plus something of value – so they’re quids in if you let them down.
You’re not happy with the credit check and they won’t pay up front? It’s up to you. The bigger the sale, the bigger the risk.
Personally I’d drop them. Too much energy goes into chasing up slow and non-payers. Energy that could be spent giving better service to good customers.
And too many businesses go to the wall chasing money they’re owed.
So if you decide to go ahead, make sure you’ve covered all the bases:
- Get them to sign your terms and conditions – and make sure your Ts & Cs are understandable – not written in Mandarin
- Don’t let them take delivery unless they sign off and agree payment
- Try to get payment before delivery – if they’ve seen what you’ve got to offer and are happy with it, why wouldn’t they pay?
- If you have to get payment after delivery, make sure they understand when they have to make payment
- Make your invoice clear and with all the right information – don’t give them an excuse not to pay
- Don’t be afraid to chase the payment – call them before it’s due to make sure everything’s in order and the day it’s due to make sure the payment’s coming
Now not every sale will need all of these steps. And not every customer will be looking for a way out to not pay.
But whether you’re selling beans, or selling high-end IT software, if you’re not getting paid up front, you need a really good, robust system to make sure you get paid.
The more automated the better.
And if we’re talking large sums, be prepared to get involved personally.
Worried about ruining the relationship? You won’t. If they’re professional, they’ll expect you to be on top of the cash.
You could get someone else to call. Or blame it on your accountant – our backs are broad!
Doesn’t matter. As long as you get that cash through the door.
Remember: