Starting up in business is a big step for anyone to take, but now could be the right time for you to make the jump!
Credit Control can be a subject of dread for most small enterprises. Here is a brief guide on how to tackle the problem effectively when your sales invoices haven’t been paid by the due date.
When a customer misses their deadline for payment ring within 48 hours. It is important not to leave it too long, to encourage payment as soon as possible. The older a debt is, the harder it is to collect. Attitude should be friendly and professional.
Ringing is almost always more effective than statements and letters.
Still No Payment
Be professional but assertive. Don’t be wary of pressuring too hard for payment. Consider what the customer is worth if they fail to pay on time for goods or services received? They have received the goods or services they requested and you are entitled to payment. It is YOUR money. Your business’s future is far more important than protecting a relationship with a customer who won’t or cannot pay their bill. Your own cash flow may be put at risk by late payments from customers.
You could consider charging late payment interest but ensure this is clearly laid out in your terms and conditions (under the late Payment of Commercial Debts (Interest) Act 1998). This will often prompt payment or act as a deterrent.
The company may be under financial stress and suffer cash flow issues. Ensure you are on their radar for payment early and they are aware you are already chasing the debt. You may want to arrange a payment plan with them.
Log all action taken to chase the payment.
Consider how much time you are willing to spend chasing a debt at the detriment of not concentrating on other customers. Debt collection agencies can be a cost effective solution to chasing and receiving customer debts.
You may also want to consider removing or reducing the credit term given to customers who have a history of late payments.
If this just all feels too much then contact us on 01440 821991. We will be happy to discuss your credit control needs and start making those calls.