How To Get Paid on Time

Posted by Dawn Baird, Partner on Mar 31, 2010 in business, customer service | 0 comments

Recently I attended an FSB How to Get Paid on Time seminar and it got me thinking.  What do we do to ensure we get paid on time?  The following ideas provide a great place to start:

• Do you have written Terms and Conditions?  Are they explained in detail to each new customer, or posted out with every invoice and bill?  Better still, are they listed on your website?  Why not?
• Be upfront.  State Terms and Conditions at the start of any large negotiation or project.  Make it clear and obvious.  If a new client can’t agree to them, it may be time to part the ways.  Or, it may be time to negotiate.
• Go with your gut.   If someone seems like too much trouble, they probably are.  This goes doubly for freelancers out there.  You really can’t afford to get stuck working with a client for a few months who you knew would probably be “problematic”.

• Do less work for those who consistently pay late.  You may think you have to suffer this at the beginning of running your business.  However, you have to weigh up whether late income is worth more than the stress and hassle of getting it in.  And, think whether that time and effort may not be better spent on other customers.  Eventually, you will be able to drop these customers altogether.
• Threaten promise not to turn up, if you’re delivering goods or services, following an unpaid invoice from a previous order.  Insist on payment on delivery, otherwise, tell your delivery drivers to come right back to the warehouse.
• Are you delaying getting paid on time?  When do you post invoices?  For example, if your Terms are 30 days from the date of the invoice, why does the invoice not get posted (first class) on the day of delivery?  Delaying this until you’re next organising the accounts wastes valuable cash-flow time.
• Avoid becoming the hidden baddie in your own story of woe!  Prepare invoices and bills in advance, and schedule credit control calls or visits – you will have no excuse to forget, if they are written in your schedule.  Make this a step in your “dealing with a new purchase” procedures.

I hope these tips will help out, especially for those just starting out.  It’s been something I’ve been asked about several times recently and thought I’d put it all down in a quick post.

Image credit: Neubie.