Debt recovery
Some tips to help improve cash flow
Cash flow problems can cripple your business. It is important that your customers pay up in full and on time. Here are some tips to help achieve this:-
1. Accept that some large companies can be very slow payers. Others only pay on receipt of a "final demand". Start chasing your customer as soon as the invoice becomes due.
2. Get to know your customers and their practices. Very large companies have a monthly cheque run and will not send you an individual cheque. Find out when the cheque run is and the day in the month when your invoice must arrive in order to be processed and paid that month. Ensure your invoice is sent to the correct address.
3. Make it easy for your customers to pay. Consider accepting payment by debit/credit card and the BACS system. Investigate the possibility of adding the extra costs to your invoice.
4. Make sure your invoices contain all the information your customers need -
- Their reference number
- Order number
- Site address
- Delivery date
- A brief but adequate summary of goods or services supplied.
5. Send monthly statements. Some companies only pay on receipt of a statement.
6. Have your Terms and Conditions printed on all quotations and try to ensure that your Terms and Conditions are incorporated into the Contract. Your Terms and Conditions should clearly state your payment terms and that interest will be added for late payment.
7. Keep comprehensive records so that you can produce quickly and easily proof of delivery and deal with any other queries raised by your customer.
8. Have a credit control procedure and timetable with standard reminder letters to be sent to the non-paying customer at regular intervals.
9. Instruct Stafford Young Jones to send a letter before action. This is inexpensive and in the majority of cases produces either an immediate payment in full or payment over an acceptable period of time.
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