Here are our top tips on how to avoid late payments:
Credit check potential customers.
By looking at a company credit report, you can see their payment behaviour based on real company experiences. This can be vital information when figuring out how they would fit into your forecasting. A company credit report can also show you any adverse information about the company, such as if they have been issued any CCJs. If a company has received a CCJ- settled or not, it usually acts as a red flag of bad payment behaviour.
Charge late payment fees.
You are entitled to charge late payment fees on outstanding invoices if they aren’t paid by the date agreed. Put a clause in your contract that states you will be charging interest on any late invoices, then your customer will know you are serious about late payments and could potentially move your invoice to the top of their list rather than suffer the extra interest costs.
Issue your own paperwork on time and maintain a contact calendar.
Make life easy for yourself and set reminders for when to send, follow up and chase invoices. It is also worth keeping in contact with your customers throughout their customer journey to ensure they are happy with your services and have no disputes before you reach the invoicing process.
Ensure your own paperwork is accurate.
Don’t give anyone an excuse to delay payment because they need an invoice to be amended and reissued. Check the dates, names, service description, address and amount are correct. Also triple check you have listed the correct bank details.
Make it easy for customers to pay your invoices.
Accept payments in multiple formats including cheques, cash, BACS and credit cards. It would also be greatly beneficial if you allow your customers to pay online via debit card or PayPal. Giving multiple options allows clients to choose what suits them best, which in turn, could mean faster payments.
By following the correct processes of due diligence and monitoring your customers consistently, you should hopefully minimise the amount of late, outstanding invoices you have to deal with; protecting your credit control management. Protecting money coming in and out of your business as part of a robust credit control policy is the key to avoiding insolvency, but also doing your due diligence and monitoring your customer base regularly is vital in keeping bad business at bay.
Try Creditsafe for free today to see how our complete package can benefit your business.