Late payments are one of the main problems facing UK SMEs. At Commercial Domestic Investigations we understand how important it is for your customers to pay you on time, if they don’t pay in a timely manner it can have major implications for your cash-flow and your business. At Commercial Domestic Investigations we wanted to share some tips with you so you can avoid your customers making late payments.
Clearly set out your credit control procedure, from the moment a customer places an order until the invoice is paid. Ensure that your collections team understand this procedure and they enforce it at all times. Not sure what to include? Read our guide on creating a great credit control policy.
Understand your customers
By credit reporting both your new and existing customers you can gain an understanding of their payment history. This gives you an insight into their financial standing before extending them credit terms. You can persistently late payers on a stop list until their account is settled, this prevents them ordering any more products/services and building up more debt.
One of the more obvious tips that we can give you is to invoice your clients quickly and most importantly, accurately. Most people will not make a payment until an invoice has been received, not only does quick invoicing make your business appear professional but it can help strengthen your relationships with your clients.
Give them all the information
Provide your customers with all of your accepted payment methods and the necessary details; clearly display this information on your invoices to avoid late payments. Consider offering and early settlement discount, but be careful about which customers your offer a discount to, read our guide on settlement discounts, here.
Keep track of your sales regularly so that you can immediately recognise invoices that have exceeded their credit terms. Chase these invoices with clients, sometimes all it takes is an email or a phone call.
Don’t be afraid to take further action if payment continues to be avoided, you are entitled to that money and it can have a huge impact on your business if it is not received.
Working in credit collection does require a certain level of cynicism. Customers will always make excuses for not paying and you should always take them with a pinch of salt. They procured your services or purchased your products, knowing full well that they would have to pay for them. Make it clear that you will charge interest if a payment is late.
Call the professionals
Credit control should be an everyday task but sometimes it can be overwhelming and difficult to keep on top of when other tasks take priority. Consider outsourcing your debt recovery to focus on other areas of your business.
Don’t forget about your customers that pay on time. It is easy to take them for granted but make the effort to thank them for their payment. This will improve their experience with you and could lead to more sales.
At Commercial Domestic Investigations, we offer a credit reporting service. This gives you a payment history for both your new and your existing customers; this is a great way to protect yourself when extending credit terms to customers. It can form a foundation to ask for deposits up front too.
Our team work with the highest level of professionalism; highly-trained to industry best practice we recover any debt with your business in mind. If you want to speak to a friendly member of our team, contact us on 08444 159200 or email firstname.lastname@example.org.