Techniques to get paid faster
Discussion
Just wondering if anyone could share some techniques that they have found effective for faster payment? I'm a sole trader and we're not talking big numbers here, but I'm starting to take late payment personally - which is affecting morale.
Invoices all have the terms and due date clearly present and my invoicing system generates reminders automatically, but it still doesn't make much difference with some customers. I suppose, on reflection, my issues are trivial compared to some businesses but I absolutely detest chasing customers for money and sometimes just wish I could pass it over to someone else to deal with - does anyone offer such a service other than debt collectors?!
Any tips gratefully received!
Invoices all have the terms and due date clearly present and my invoicing system generates reminders automatically, but it still doesn't make much difference with some customers. I suppose, on reflection, my issues are trivial compared to some businesses but I absolutely detest chasing customers for money and sometimes just wish I could pass it over to someone else to deal with - does anyone offer such a service other than debt collectors?!
Any tips gratefully received!
What do you sell, and how.
Here's how we roll - prob less than 3% outstanding at any one time. This has fallen from about 60% outstanding,and a worry that I wouldn't be able to pay my bills on time.
1) All internet accounts have to be paid before we post the product.
2) All direct customers we try and raise an invoice before they are here to collect. We take cheques, and will ask people how they would like to pay before they leave. Cheques are still a decent option. (Cheap and easy).
3) Sometimes we don't invoice until we are sure the job is OK - that's OK as invoices are not outstanding until we issue them.
4) A small percentage of customers need to be reminded, but these are small, and usually remote, or the invoice follows some time after the work. A gentle phone call usually sorts themout with no worries. Phone at the end of the month when people have been paid,and tell them you need to pay your bills to. Works lovely.
5) Some customers are t
ts - they will not pay on time. If we excessively chase three times, we don't work for that customer. We do decent work, stand by it, and bend over backwards to help. It's their lose if we don't work for them. We never tell them this - no point in a small community. We just say we are busy, can't do that type of work, would be noncompetitive etc etc. Very occasionally we have been very blunt with some, and said we would prefer not to work with them because they don't pay. That's a very strong message to receive.
Our turnover is about 100k or so, and our current outstanding is £296 on a raised but un-presented bill
Here's how we roll - prob less than 3% outstanding at any one time. This has fallen from about 60% outstanding,and a worry that I wouldn't be able to pay my bills on time.
1) All internet accounts have to be paid before we post the product.
2) All direct customers we try and raise an invoice before they are here to collect. We take cheques, and will ask people how they would like to pay before they leave. Cheques are still a decent option. (Cheap and easy).
3) Sometimes we don't invoice until we are sure the job is OK - that's OK as invoices are not outstanding until we issue them.
4) A small percentage of customers need to be reminded, but these are small, and usually remote, or the invoice follows some time after the work. A gentle phone call usually sorts themout with no worries. Phone at the end of the month when people have been paid,and tell them you need to pay your bills to. Works lovely.
5) Some customers are t
ts - they will not pay on time. If we excessively chase three times, we don't work for that customer. We do decent work, stand by it, and bend over backwards to help. It's their lose if we don't work for them. We never tell them this - no point in a small community. We just say we are busy, can't do that type of work, would be noncompetitive etc etc. Very occasionally we have been very blunt with some, and said we would prefer not to work with them because they don't pay. That's a very strong message to receive.Our turnover is about 100k or so, and our current outstanding is £296 on a raised but un-presented bill
bearman68 said:
5) Some customers are tts - they will not pay on time. If we excessively chase three times, we don't work for that customer. We do decent work, stand by it, and bend over backwards to help. It's their lose if we don't work for them. We never tell them this - no point in a small community. We just say we are busy, can't do that type of work, would be noncompetitive etc etc. Very occasionally we have been very blunt with some, and said we would prefer not to work with them because they don't pay. That's a very strong message to receive.
We just stop doing work for our non paying customers and then when they call/email to complain, I explain they haven't paid and we'll start supplying them again once their accounts are cleared up to date. Obviously some accounts payables work in different ways, but once anything has got to 3 invoices (we invoice every 28 days, so lots of people view an August invoice as payable October etc) they go on stop.ts - they will not pay on time. If we excessively chase three times, we don't work for that customer. We do decent work, stand by it, and bend over backwards to help. It's their lose if we don't work for them. We never tell them this - no point in a small community. We just say we are busy, can't do that type of work, would be noncompetitive etc etc. Very occasionally we have been very blunt with some, and said we would prefer not to work with them because they don't pay. That's a very strong message to receive.Customers not paying on time used to not bother me, but I too now take it quite personally. And it's always the pushiest customers that are the worst payers for some reason.
Interesting thread....
I will go out and measure a property and prepare a plan. At that point I send the invoice, and when it's paid will send the plan.
More difficult with account customers - often solicitors.
Some will say please address the invoice to xyz. I don't like that option as I'm chasing through the solicitor, and my message gets watered down.
Currently have one 90 day outstanding. I'm waiting for NHS Wales to pay apparently. Not impressed.
I too take it personally.
I will go out and measure a property and prepare a plan. At that point I send the invoice, and when it's paid will send the plan.
More difficult with account customers - often solicitors.
Some will say please address the invoice to xyz. I don't like that option as I'm chasing through the solicitor, and my message gets watered down.
Currently have one 90 day outstanding. I'm waiting for NHS Wales to pay apparently. Not impressed.
I too take it personally.
I love phoning up Wakefield and doing the whole "you don't have a purchase order number and need one" routine with them. Ive found requiring an upfront deposit weeds out the slow/non payers.
If they are not happy to make a deposit, then they are likely to be trouble after work is done!
Also on larger jobs, take a weekly payment.
Atleast you then have some payments, better than completing a couple of week contract, then waiting weeks on end for several thousand!
Obviously depends on your business, but it works for me, am yet to have a non payer since
Yes i may loose the odd genuine customer who is too paranoid to make an upfront payment, but end of the day it only takes 1 non payer to wipe out the profit of many!
If they are not happy to make a deposit, then they are likely to be trouble after work is done!
Also on larger jobs, take a weekly payment.
Atleast you then have some payments, better than completing a couple of week contract, then waiting weeks on end for several thousand!
Obviously depends on your business, but it works for me, am yet to have a non payer since
Yes i may loose the odd genuine customer who is too paranoid to make an upfront payment, but end of the day it only takes 1 non payer to wipe out the profit of many!
surveyor said:
Interesting thread....
I will go out and measure a property and prepare a plan. At that point I send the invoice, and when it's paid will send the plan.
More difficult with account customers - often solicitors.
Some will say please address the invoice to xyz. I don't like that option as I'm chasing through the solicitor, and my message gets watered down.
Currently have one 90 day outstanding. I'm waiting for NHS Wales to pay apparently. Not impressed.
I too take it personally.
How does that correspond to the 30 day public sector payment policy? or are you being filtered by a middle man?I will go out and measure a property and prepare a plan. At that point I send the invoice, and when it's paid will send the plan.
More difficult with account customers - often solicitors.
Some will say please address the invoice to xyz. I don't like that option as I'm chasing through the solicitor, and my message gets watered down.
Currently have one 90 day outstanding. I'm waiting for NHS Wales to pay apparently. Not impressed.
I too take it personally.
Very good advice
5) Some customers are tts - they will not pay on time. If we excessively chase three times, we don't work for that customer. We do decent work, stand by it, and bend over backwards to help. It's their lose if we don't work for them. We never tell them this - no point in a small community. We just say we are busy, can't do that type of work, would be noncompetitive etc etc. Very occasionally we have been very blunt with some, and said we would prefer not to work with them because they don't pay. That's a very strong message to receive.
My business is in the service industry so invoicing happens after the work is complete ( mostly small jobs) so it is a waiting game, with experience you will have an inkling of whether payment will come your way upon meeting and talking to your prospective customer, but is not conclusive. My experience is large companies are the worst payers, one very large TV company was threatened with withdrawal of labour as payment was overdue by 4 months and was valued at thousands. A brave step to take , but payment was received regularly after that and we continued to work for them for years afterwards. I guess it depends how much you are valued. I have been "knocked " twice in 25 years and consider myself fortunate. If you can cover the loss things are not so bad as you can write the loss off as a bad debt. You could arrange a credit amount with you customer and expect immediate payment to continue to work once that value is reached.
Good luck.
5) Some customers are tts - they will not pay on time. If we excessively chase three times, we don't work for that customer. We do decent work, stand by it, and bend over backwards to help. It's their lose if we don't work for them. We never tell them this - no point in a small community. We just say we are busy, can't do that type of work, would be noncompetitive etc etc. Very occasionally we have been very blunt with some, and said we would prefer not to work with them because they don't pay. That's a very strong message to receive.
My business is in the service industry so invoicing happens after the work is complete ( mostly small jobs) so it is a waiting game, with experience you will have an inkling of whether payment will come your way upon meeting and talking to your prospective customer, but is not conclusive. My experience is large companies are the worst payers, one very large TV company was threatened with withdrawal of labour as payment was overdue by 4 months and was valued at thousands. A brave step to take , but payment was received regularly after that and we continued to work for them for years afterwards. I guess it depends how much you are valued. I have been "knocked " twice in 25 years and consider myself fortunate. If you can cover the loss things are not so bad as you can write the loss off as a bad debt. You could arrange a credit amount with you customer and expect immediate payment to continue to work once that value is reached.
Good luck.
Edited by felixlighter on Thursday 29th October 19:18
Vaud said:
surveyor said:
Interesting thread....
I will go out and measure a property and prepare a plan. At that point I send the invoice, and when it's paid will send the plan.
More difficult with account customers - often solicitors.
Some will say please address the invoice to xyz. I don't like that option as I'm chasing through the solicitor, and my message gets watered down.
Currently have one 90 day outstanding. I'm waiting for NHS Wales to pay apparently. Not impressed.
I too take it personally.
How does that correspond to the 30 day public sector payment policy? or are you being filtered by a middle man?I will go out and measure a property and prepare a plan. At that point I send the invoice, and when it's paid will send the plan.
More difficult with account customers - often solicitors.
Some will say please address the invoice to xyz. I don't like that option as I'm chasing through the solicitor, and my message gets watered down.
Currently have one 90 day outstanding. I'm waiting for NHS Wales to pay apparently. Not impressed.
I too take it personally.
Thanks for your comments. Will look into the credit management services although I suspect my business might be too small for some. I don't actually have any non-payers but I'm completely bored with nudging customers for payment!
A fair slice of my work is ad-hoc computer repairs/IT support. By it’s nature this involves dealing with distressed users who are in a bit of a panic. However, once the fix has been completed and they’re working again that initial feeling of panic is long forgotten. To be honest I’d rather scale down this type of work as for most people it’s always going to be a "grudge purchase".
Some of my customers are very small businesses but when it comes to payment terms they pretend to act like Megacorp PLC! They seem surprised when I object to a 45 day wait for payment of a £100 invoice!
A fair slice of my work is ad-hoc computer repairs/IT support. By it’s nature this involves dealing with distressed users who are in a bit of a panic. However, once the fix has been completed and they’re working again that initial feeling of panic is long forgotten. To be honest I’d rather scale down this type of work as for most people it’s always going to be a "grudge purchase".
Some of my customers are very small businesses but when it comes to payment terms they pretend to act like Megacorp PLC! They seem surprised when I object to a 45 day wait for payment of a £100 invoice!
Bikerjon said:
Thanks for your comments. Will look into the credit management services although I suspect my business might be too small for some. I don't actually have any non-payers but I'm completely bored with nudging customers for payment!
A fair slice of my work is ad-hoc computer repairs/IT support. By it’s nature this involves dealing with distressed users who are in a bit of a panic. However, once the fix has been completed and they’re working again that initial feeling of panic is long forgotten. To be honest I’d rather scale down this type of work as for most people it’s always going to be a "grudge purchase".
Some of my customers are very small businesses but when it comes to payment terms they pretend to act like Megacorp PLC! They seem surprised when I object to a 45 day wait for payment of a £100 invoice!
Change your policy. Payment before release.A fair slice of my work is ad-hoc computer repairs/IT support. By it’s nature this involves dealing with distressed users who are in a bit of a panic. However, once the fix has been completed and they’re working again that initial feeling of panic is long forgotten. To be honest I’d rather scale down this type of work as for most people it’s always going to be a "grudge purchase".
Some of my customers are very small businesses but when it comes to payment terms they pretend to act like Megacorp PLC! They seem surprised when I object to a 45 day wait for payment of a £100 invoice!
R1 Indy said:
Ive found requiring an upfront deposit weeds out the slow/non payers.
If they are not happy to make a deposit, then they are likely to be trouble after work is done!
Also on larger jobs, take a weekly payment.
Atleast you then have some payments, better than completing a couple of week contract, then waiting weeks on end for several thousand!
Obviously depends on your business, but it works for me, am yet to have a non payer since
Yes i may loose the odd genuine customer who is too paranoid to make an upfront payment, but end of the day it only takes 1 non payer to wipe out the profit of many!
I make it a rule never to pay a deposit or any money upfront. If they are not happy to make a deposit, then they are likely to be trouble after work is done!
Also on larger jobs, take a weekly payment.
Atleast you then have some payments, better than completing a couple of week contract, then waiting weeks on end for several thousand!
Obviously depends on your business, but it works for me, am yet to have a non payer since
Yes i may loose the odd genuine customer who is too paranoid to make an upfront payment, but end of the day it only takes 1 non payer to wipe out the profit of many!
Bikerjon said:
Vaud said:
Change your policy. Payment before release.
I do this (mostly) for private individuals, but the small businesses will just go elsewhere.As for billing I once heard a litigation solicitor say "Bill them whilst the tears of gratitude are still wet on their face."
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