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Making sure you get paid what you're due

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By Alistair Marr

February 17, 2012 | 3 min read

I said I was going to talk about cash and in this blog am concentrating on collecting your receivables. Its important to every business. How many companies de we know that have closed because they run out of creative ideas – I would hazard a guess that its a big fat zero to that question , but we all know many businesses who have run out of money. Even profitable companies fail this way.

So here are some random tips to make the billing and invoicing cycle as efficient as possible. This article will concentrates on preparation next time on collection.

Aim for stage payments or down payments. Try to achieve that when the project is 100% complete it is fully paid for or at the very least fully invoiced.- Best to negotiate the payment terms at the outset or quotation stage.

Ensure your terms and conditions are robust and up to date. An amazing number of businesses don’t even have proper T’s and C’s. They should also be part of the proposal so any contentious points can be negotiated in advance. There are plenty of people with expertise in this area who can help you put the correct terms together. This will probably for a whole blog in the future.

Choose your clients carefully. These are tough times at the moment and many out there are in soapy bubble financially. So we need to exercise care in who gets credit terms often it’s not easy to get information but one thing overlooked is track record – if a client has mucked you about on payment in the past then there’s a strong chance they will again. It’s not worth betting your business on a large potential bad debt.

Stand firm. Many of the guys reading this will be producing subjective products or services hence it is all the more important to engage with your client in the process so that at the end they don’t baulk at paying stating that it’s not what they asked for or what they wanted. Sadly there are a lot of cowboys out there who have no scruples about complaining if it can save them a few quid.

Get it right first time. In this case specifically the invoice. Particularly if you are working for a government body – they seem to employ teams of people whose sole role in life is to find errors in invoicing to delay payment.

Get the invoice out promptly. Seems dead obvious but again let’s be honest how many of us delay on this. Remember the time to pay hopefully 30 days or even less if we are lucky probably won’t start until the invoice arrives at the end client.

So there we have it a few rules on credit collection next time what to do once the invoice has landed with the clients.

Until next time

Cheers

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