Did you know that more businesses fail due to lack of cash than fail due to lack of profits? And a lot of this is because their customers haven't paid them. So what are the best 10 ways to make sure customers pay on time?
Make sure customers pay on time: Top 10 tips
- Get paid up front - this might be easier than you think.
- Stage payments - if you can't get paid up front, get payment in stages including being paid a deposit
- Invoice your customers straight away - if you don't invoice you probably won't get paid
- Find out when your customer pays their invoices - and make sure your invoice hits their desk before then!
- Be rigorous in chasing outstanding invoices - new technology (including Xero) can automate this process for you
- Reduce the time you give to pay - if your current terms are 45 days, reduce them to 30days
- Make sure you know who is responsible for paying your invoice and keep in touch with them - this quite often won't be the same person who's ordered your services
- Pick up the phone to chase payment - a phone call is harder to ignore than a letter or email
- Ask someone else to chase on your behalf - it can be easier for a third party to chase payment as they don't have the relationship with the customer (but make sure they know the limits as to how they should chase!)
- Don't be worried to threaten legal action with a really problem customer - a solicitor's letter may do the trick and if necessary take action through the small claims court
Our eBooks cover this and many other topics. Check them out here.
And if you'd like to know how we can help you with all of this, or with anything else, feel free to give us a call on 01202 048696 or email us at [email protected].