Tips to ensure you get paid

Cash flow is imperative to the success of your business and when customers fail to make payments it can make life extremely difficult for you, especially as you have your own obligations to meet. However, it's not uncommon to run into payment delays with your customers and it's important to try and consider their own circumstances before writing them off.

With that in mind, there are some simple processes you can introduce to help limit the possibility of not receiving payment on time.

Always research new customers

It's vital that before extending credit to any new customers you review their payment history and determine the risk associated with that customer. Undertaking research can be as simple as ordering a credit report online to determine the financial stability of potential customers.

Although you have the option of cold calling businesses that previously worked with the customer, a credit report is a much more convenient and accurate measure to use when evaluating risk.

Stick to your terms

If your payment option is thirty days, make sure you receive payment within thirty days. Being lenient might seem helpful, but your customers may take advantage of your good faith and try to delay payments as a result.

It's best to follow up all overdue payments with a telephone call or reminder letter and clearly outline the amount owing as well as the date it was due.

Don't take it personally

Always remember that business is business, even in the instance you have a personal connection or close relationship to your customers.

A good way to separate your personal relationships from your business is to create a comfortable professional distance between yourself and customers when chasing payment. This can be done as simply as creating an accounts email and removing your name from reminders or statements that are sent out, or by hiring a freelance administrator who can chase the payment for you.

Outsource to a collection agency

As many SME owners are time starved there will be occasions where it just makes more sense to outsource your debt. Collection agencies will not only have more time to follow up payments; they also have more experience handling these types of situations.

The most important thing when deciding to outsource to a collection agency is that you do enough research and find a collection agency that makes sense for your business.

Building a strong customer base is great for business, but it doesn't guarantee success. As we have reiterated on this site before, there's no point having customers if they aren't going to pay their invoices. Processes will not only ensure your customers are aware of the payment owed, they will also alert that late payments won't be tolerated.

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