I was stood inside a workshop collecting the overdue balance plus costs from the business proprietor “Mr Smith”, whose business owed several thousand pounds. I was paid in full, not by cheque – I don’t accept them, but in cash. This wasn’t money owed to me. This belonged to my client who was struggling with several unpaid invoices and was barely solvent.
When I asked “Mr Smith” why he hadn’t paid his bill on time he mentioned that he needed the cashflow as his own business was growing rapidly….!
Don’t be used as a bank.
While we all strive to maintain our business relationships and don’t want to endanger established contacts with harsh payment regimes, we also need to establish firm terms of business and adhere to them.
Unpaid invoices are a growing problem for SME’s and a staggering £33.6bn is currently overdue. The average amount owed is a staggering £39,000 according to recent research conducted by Bacs*. How much are you owed?
So how can we prevent unpaid invoices?
- Avoid customers with poor credit history or stipulate cash on delivery to those in that category.
- Most invoices state that the terms of payment are within 30 days. Stamp the invoice with the date that the payment is due to you as a prominent reminder.
- If an unpaid invoice passes the deadline, phone them immediately and chase your payment. It’s your money, and your customer needs to realise that you are as efficient in business as you are in collecting monies owed to you.
- Until a customer pays their bills don’t do any more business with them. If they can’t pay this invoice how will they pay the next one too?
- Lastly, there are no friends in business when an invoice remains unpaid. If they respect you enough as a business they will pay on time as you do.
Most customers will pay on time, and adhering to those simple points will certainly assist in maintaining a good business cashflow.
In my next guest blog….
Learn several easy ways in which we can collect your unpaid invoices, including the addition of interest to those outstanding balances. Yes really! You can charge interest on commercial debt!
Mark Walker of Walker Enforcement Ltd.
Debt Recovery, Certificated Bailiff and High Court Enforcement Services.
*Bacs Payment Schemes Ltd
Images courtesy of : Danilo Rizzutti,Image: jscreationzs / FreeDigitalPhotos.net” target=”_blank”>jscreationzs.