Credit Control, Customers Pay your Bills!

[Golfman]

How to get my money from customers quicker…?
We currently do the following:
1/ Send and Invoice! (terms within 30 days EOM)
2/ Send a monthly statement.
3/ Get on the phone and start hassling people when invoices are around 60 days due.
4/ Probably send another invoice or statement because they “never received one” originally.
5/ I get the arse and start moaning about cash flow etc to everyone in the office…
6/ We send an official solicitors letter (costs £3.00 each time). This usually gets most people to pay.
Is there a better way than this? I refuse to go down the invoice finance / factoring route so don’t even mention it. For what these cost I could employ someone permanently on the phone chasing people up!
Thanks.

[Plotloss]

Feature of the current market, I currently have far more than I'm comfortable with sitting on invoice.

[Deva Link]

Are these regular customers, or is it all one-off orders?

One thing you could do, is do item 3 at say 20 days, not 60. Just checking they've got the invoice and it's cleared to pay etc.

[Golfman]

Deva Link said:

Are these regular customers, or is it all one-off orders?

One thing you could do, is do item 3 at say 20 days, not 60. Just checking they've got the invoice and it's cleared to pay etc.

Means more work...

[edb49]

It sounds like you need an automated credit control system. We send email reminders, postal reminders, late payment fee, suspend services, etc etc all depending on the client's payment history and value of their contract. We've got about 50 separate rules with the way we deal with late payment, and it's very effective. We also have a reminder before due date at 7, 3 and 1 day, and they can download their invoices online.

We have less than 0.5% of our turnover overdue.

[HRG]

Cheque on delivery.

[Plotloss]

HRG said:

Cheque on delivery.

Vast majority of mine now do staged payments in advance.

Makes it easier, mostly.

[Lurking Lawyer]

Plotloss said:

Feature of the current market, I currently have far more than I'm comfortable with sitting on invoice.

:rubshands:

;)

Only joking of course. Despite it being part of what I do to earn a crust, I wouldn't wish trumped-up disputes to avoid payment, or just simple non-paying customers, on any small business.

Unless you're going to do it yourself, the litigation process just isn't cost-effective - especially if it's sub-£5K and therefore the no-costs rule applies.

[Mattt]

Offer a prompt payment discount of say 5%, but then increase your prices by 5%.