When you have selected your shopping in a supermarket, there is no question of you not paying, is there? You want the goods, so you pay. Well, why should it be any different paying small businesses? But it is! Almost half of all invoices are paid late.
Remember, once you’ve completed the work, you deserve to be paid.
Late payment will affect your cashflow, as well as consume your time and energy as you chase debtors. So how can you avoid being in this position?
There Is No Excuse For Late Payment
Because of digital technology, there is no excuse for a delay in payment. I remember when I first started out as an accountant, we would send letters in the post and not expect to have a reply for a couple of weeks. Nowadays, it’s completely different and we send emails and expect a prompt reply. Invoicing is the same. Invoices can be sent via email directly from software such as Xero and, because the invoices will be received immediately, 30 days are no longer needed as payment terms – a week is plenty! Also, payment these days is usually made by BACS, so no delay is needed to be factored in waiting for cheques to arrive, get paid in and then clear.
What Can You Do To Get Paid On Time?
1. Discuss payment terms before you commence work so all parties are clear.
2. Send invoices promptly and digitally.
Don’t put this off as the customer won’t even think about paying you until they have the invoice in their hand.
3. Don’t be afraid to chase payment.
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The full review can be found in Pro Mobile Issue 104, Pages 52-53.