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Many small businesses struggle every month with late payment by clients. Late payment affects business cashflow, the viability of the enterprise and even employee morale. Late payment is unnecessary.
So what can you do about late payment?
There are several steps you can take to ensure you get paid on time...
Be in control.
It’s important to embed good credit control processes into your business – and ensure they are followed every time without exception. Just having a well-oiled process can significantly reduce the risks of late payment by clients.
Be firm, but fair.
It would be nice if clients paid their bills without reminders or on the first time of asking. Alas, that’s rarely the situation in today’s hectic commercial jungle. Clients have lots of distractions competing for their attention. Once they’ve received the goods or services on time, settling-up often gets little attention, pushed onto the back-burner. Late payment is so common, many suppliers expect it. But it doesn’t have to be like that. Don't accept any late payment excuses, be firm but fair.
Late payment can jeopardise a good supplier-customer relationship. But that doesn’t mean you should be a push-over. Be clear about what money is owed to you by the client and ask for it. Ask and ask again, if necessary. This is where a dedicated receivables manager can be worth their weight in gold. Whilst they chase up clients for outstanding payments, you can focus on the day-to-day aspects of the business which drive revenues.
Get help (if you need it).
In most small businesses, the owner/manager wears a multitude of hats. Overdue payments and credit control can be a real distraction from running the business. And it’s difficult to chase-up a client’s accounts department if you are also the same person doing the sales or delivery work on a project for the same client. Then there's the tricky subject of late payment charges and late payment legislation (which varies country-to-country). Fido can easily run alongside small business finance solutions such as invoice finance. Ask yourself, do you really want to manage this part of the business? If not, get help!
We can help.
If this looks like hard work, consider using a service like FidoHQ to professionally manage your client payments.