Companies face many struggles as they grow and develop. We know that one of the most common challenges is collecting payment for the goods and services you have provided. Read on for our six most popular solutions to getting paid on time...
1. Agree scope of work
Clearly state your costs and payment terms on the contract and ensure your client agrees before starting work - set expectations early on.
Making sure all involved parties are clear and in agreement as to payment, before any work goes ahead, will make it far easier to chase your customer once payment is due. Proof of their agreement to your terms and conditions will make your case much stronger if they cause delays.
2. Multiple forms of payment
Be open and accepting to multiple forms of payment to maximise your potential for on time payments.
Not accepting certain payment methods could give your customers reson to delay paying you what you are owed. Being open to multiple forms of reimbursement - ideally including credit cards - leaves your customers no excuses! Take advantage of the fact that everyone with an internet connection has access to free cloud systems such as PayPal and soon reap the benefits of your open payment methods.
3. Request an upfront payment
Ask for an upfront deposit or set up a payment scheme.
This involves taking a proportion of the cost before work commences and is an effective, yet reasonable way to set boundaries for your customer. Equally, a reduction in the due balance once the work is complete could also have a positive impact on their ability to pay.
4. Set terms and enforce them
Encourage clients to stick to your payments terms.
If your clients do not pay within your agreed, specified time limit then it is important that you follow through with your conditions. Make sure your invoices clearly state what will happen when payment is delayed: whether that means charging interest, reporting them to the relevant parties or in extreme cases, taking legal action.
5. Prompt Payment Code
Promoting best practice between businesses and their suppliers.
The Prompt Payment Code was set up by the Department of Business, Enterprise and Innovation and encourages best practices between organisations and their suppliers. Signatories to the Code commit to paying their suppliers within clearly defined terms and commit to ensuring there is a proper process for dealing with any issues that may arise. This code gives suppliers the opportunity to build stronger relationships with their customers, safe in the knowledge that they will be paid, and confident that they are working with a business that values the service they deliver.
6. Invoice finance
Access to your money
Invoice finance is simple. As soon as you raise an invoice, you are provided immediate access to your money, easing cash flow pains and helping you to bolster your business performance.
Using an online invoice discounting facility such as IDeal offers the same benefits and releases working capital for you upfront, however it is also completely confidential as you continue to manage your own customers' settlements.
For further peace of mind, you could also sign up for bad debt protection cover which ensures you get paid for your work, even if your credit approved customers get into difficulty.