Did you know that only 51% of businesses paid their invoices within the 30 day payment terms, 33% were paid between 31 and 60 days with 15% being paid after 60 days. That means that businesses have to wait a lot longer than expected for payment!
Legislation has been brought into speed this up, but it is not universally applied, and many companies understandably value the ongoing orders too much to charge for late payments and often find chasing customers difficult and perhaps not on top list of the favourite activities!
The good news is there are some proactive steps you can take to make sure you are on top of the pile to be paid…
1. make sure you get the company you are dealing with correct. There are reports of companies using a name which has a strong credit rating but if you look at detail the company registration number is different – check company numbers not just names
2. agree what credit limit you are prepared to go to for the outstanding trading, it is recommended to get some form of debtor insurance either direct or through bad debt protection with an invoice finance or recruitment financier
3. make sure you get your terms and conditions signed, offer your standard ones or make sure you obtain, read and understand others provided, it is so much easier to do this before you start to trade and makes the raising of disputes much more unlikely
4. raise your invoice on time at the same time each week for any temporary work and make sure it is sent to the right person, with the back-up timesheets or proof of employment, phone to make sure it is received
5. make sure the payment terms are on the invoice and the payment instructions are clear
6. write your credit control process down, even if it is just for you, it will help you ensure you escalate chasing at the right time if not paid
7. call just before invoice is due to make sure there are no issues with the invoice and the payment is scheduled
8. if not paid on terms, send a polite email as a reminder at different intervals and refer back to your credit control process to see when you should stop sending in workers
9. go legal if you need to, you can use your own lawyer or you can visit https://www. moneyclaim.gov.uk/web/mcol/welcome
10. consider outsourcing this so you can spend more time on growing your business and have someone else deal with the admin! At giant finance+ we provide payroll systems and support, invoice finance, bad debt protection and credit control. Get in touch today to find out more.