Tips for getting late payments paid earlier or on time
Don’t listen to the excuses
You already know most of them, “Can you resend the invoice”, “it’s passed
for payment” and ‘the cheque is in the post’. Get invoices paid directly
into your account. Your customer can not themn use the excuse that the cheque
may be lost or that it is waiting for signature. You can also list a late payer on sites which offer business debt collection services, websites which are cheap and cost effective.
Work at it
Don’t think that businesses will pay you on time. You need to build
relationships with people who hold the purse strings in companies which are
slow in paying. Phone them, talk to them, smile on the phone to them, get them
on your side. Be like a rat up a drain pipe and pester them in a nice way.
Before you know it you will be the first to be paid. A phone call in
advance of the payment date confirming that you will receive payment puts your
contact on the spot and he might not want to let you down. Paying direct into
your bank is good, meet with your customers and press them into this
Ask for interest and ask for prompt payment
It is possible and legal to ask for interest on late paid invoices.
Encourage prompt payment, if your pricing allows , hard in today’s climate,
offer a prompt payment discount and link it in with Bacs electronic payment.
You will see a positive cash flow with money going into your account quickly.
Not waiting for money to clear means that you can use it immediately and don’t
have to rely on costly loans.
Do as you ask
Don’t get a bad reputation yourself as a bad payer news travels fast so pay
your suppliers on time.
Is a business a bad risk ?
Check them out through debt recovery companies or associations they may be in, check out Companies
House which can provide reports on line to you. Prevent risk by doing a credit
risk check on all new potential customers. risk by performing a credit
check on all new customers. Beware of companies which give may give
referees which provide a big proportion of their supplies, ask what percentage
they are responsible for. That supplier may be paid on time every month because
not to do so could influence deliveries. Business debt collection is hard, one needs to be tough to make it work.
Internal Cost of Late Payment
Some companies are paying for dedicated staff to chase late payment others are not so fortunate. On average the internal cost for those not able to afford dedicated staff can be up to 20 lost working days per year.
More and more businesses are finding that they are spending more on debt recovery collection than ever before. Those companies which don't chase late payment find themselves getting deeper into debt and possibly closing when they failed to pick up on the fact that a customer was on it's last legsThe cost of funding staff to chase late payment is spiralling.
Is a business a bad risk ?
Beware of companies which give may give referees which provide a big
proportion of their supplies, ask what percentage they are responsible
for.Check them out through any associations they may be in, check out Companies House which can provide reports on line to you. Prevent risk by doing a credit check on all new potential customers. risk by performing a credit check on all new customers. That supplier may be paid on time every month because not to do so could influence deliveries.
Work at it
Don’t think that businesses will pay you on time. You need to build
relationships with people who hold the purse strings in companies which
are slow in paying. Phone them, talk to them, smile on the phone to
them, get them on your side. Be like a rat up a drain pipe and pester
them in a nice way. Before you know it you will be the first to be
paid. A phone call in advance of the payment date confirming that you
will receive payment puts your contact on the spot and he might not
want to let you down. Paying direct into your bank is good, meet with
your customers and press them into this.
Don’t listen to the excuses
You already know most of them, “Can you resend the invoice”, “it’s
passed for payment” and ‘the cheque is in the post’. Get invoices paid
directly into your account. Your customer can not themn use the excuse
that the cheque may be lost or that it is waiting for signature.
Ask for interest and ask for prompt payment
It is possible and legal to ask for interest on late paid invoices.
Encourage prompt payment, if your pricing allows , hard in today’s climate, offer a prompt payment discount and link it in with Bacs electronic payment. Threaten to put the matter in the hands of professional debt collection agencies. You will see a positive cash flow with money going into your account quickly. Not waiting for money to clear means that you can use it immediately and don’t have to rely on costly loans.
Do as you ask
Don’t get a bad reputation yourself as a bad payer news travels fast so pay your suppliers on time.
It has long been said that UK companies have a reputation of being the
worst of the European late payers. Legislation to reduce payment delays
and add interest to overdue invoices has been in place for a long time
with little sign that it is being adopted.
Where
late payment is traditionally one sided in favour of the late payer,
DUE2PAY redresses the balance by giving the late payer the opportunity
to flag up a reason for late payment of a specific invoice or invoices.
All members have sight of this information and all members can contact
the late payer or other members. Court action or solicitor’s letters do
not offer this service. Debt recovery has now been taken to a new level
with DUE2PAY.
Industry late payment
figures have shocked industry observers who fear that late payment is
likely to get worse with the rise in interest rates and the economy
taking a downturn, factors that make retaining cash for as long as
possible even more attractive. This level of late payment comes despite
legislation phased in since 1998 that was designed to encourage better
payment practice by allowing firms to claim interest on Invoices that were not paid on time.
A
major factor for UK companies taking longer to pay invoices was the
increase in interest rates. In times of high interest rates it was
natural to look on suppliers as a cheap form of loan. Extending payment
for 1 month means that you do not have to borrow and pay interest to a
bank to fund that loan for 1 month. With banks tightening their belts
it is harder to get loans and coupled with a reduction in interest
rates the delaying of payment still continues as a method of managing
cash flow.
With DUE2PAY a company can list a late payer and other members have sight of this information. Find more out here.
The UK culture of late payment damages business,
employment and international trade.The two main factors agreed by many
to be the greatest challenge to business growth is restricted financial
lending and late payment. The two go hand in hand. Banks will not lend
money so where else can a business be funded ? For many it is the
unfortunate supplier and it is the less vigilant or commercially aware
supplier which suffers.
This is the point at which companies have to
be aware of the other tools available to them. For new accounts a
company credit check is essential, whilst these are historical they
provide useful information. The use of other methods such as
due2pay.co.uk , business debt collection and solicitor’s letters may
seem extreme but are essential in this day and age. DUE2PAY’s approach
to late payment takes the company credit check to a much needed area.
Companies have been wanting a central register of late payers for a
long time.
