The effects of late payments and tips on what you can do to reduce them!

According to BACS “LATE PAYMENTS ARE COSTING SMALLER UK BUSINESSES MORE THAN £2BN A YEAR”

You have spent money on advertising and marketing, built a rapport with your customer, got to know their dogs name, and the ‘ins and outs’ of their life, you make the sale/get the gig! Or so you think….

a sale is not a sale until the payment has been made!

Making the sale or in a performers brain, getting the booking, is obviously important, but so is collecting the money owed for your services or goods!

Having money owed to you, especially for companies that sell on credit terms of up to 90 days can have a devastating effect on your cash flow.

You still have to pay your bills, your staff, tax and your own suppliers….

We were told by one of our business associates that their artist couldn’t get to their next performance (gig) because she didn’t have enough money to pay for her petrol, because the previous performances that she had completed, still owed her the money!

So here are some pointers on how you can avoid late payments:

  • Ensure your client / customer is aware of your payment terms even before you make the sale.
  • Include your payment terms on the invoice you send to them. “Payment required within 7 days of invoice date” for example.
  • Set a routine weekly to process and chase payments in order to keep on track with them. Do it like a habit. Every week!
  • Have a credit control / or system in place that you follow weekly / monthly to ensure that late payments or payments that have potential to become late are kept on track of.
  • Keep in touch with your client / customer

“Effective credit control will improve cashflow and boost the odds of the business surviving.Times, Sunday Times (2012)”

If you simply don’t have the time to regularly keep on track with this, hire a Credit Control out-sourcing agency to look after, keep on track and keep you up to date with your cash flow.

This will allow you more time to focus on making the sale and the out-sourcing company will ensure that sale payment is made!