Top 10 Tips For Getting Paid As a Small Business ( P.S. Don’t Forget Beryl !)
Cashflow is a problem for many small businesses and it is one of the main points that new clients will raise with me and the team at Hemingway Bailey. Figures from the FSB say that in the last 12 months, 73% of members had suffered from late payment from customers & that 23% had to write off invoices.
Top 10 Tips
To help small businesses to get their cash in quicker, these are my top 10 tips to help small businesses :
- Research your prospective customer. Do credit checks for the larger value ones and ask your peers about them if it is a business customer.
- Aim to get a contract / terms of engagement with your terms and what will happen if late payment occurs.
- For business customers, always ask for a purchase order number.
- When you have completed the work, get the customer to sign off that it is completed and to their satisfaction.
- If you are a tradesperson, take pictures of your completed work. There is really good software out there now that you can raise invoices and attach pictures of your work to the job, all via your smartphone.
- An obvious one but it is surprising how many businesses do not send the invoice straight away ! Business customers will not pay without an invoice.
- Always confirm that the customer has received all of the paperwork. With software such as Quickbooks Online that we give to all our business clients, they can see if a client has opened the invoice which has been sent via E-Mail.
- For large businesses, payments will be made by the accounts payable section and so always ensure you are putting pressure on your contact to get it paid on time. They will not like that and they will pressure the accounts department to get it paid.
- Large businesses might only pay once or twice a month and if you miss this slot, you could wait upto a month. Find out when these slots are and and ensure no reasons not to pay you.
- Lots of great software out there now which will automatically send E-Mail reminders and statements to customers prior to payment due date with copy invoices. Using this will mean you can focus more on your problem payers. At Hemingway Bailey we have a lot of experience of implementing such software and the cost can be £20 a month or less for the actual software and the setup cost is soon outweighed by the improved cash collection.
What about Beryl ?
Having been in charge of a number of finance departments in different industries, always remember that the people who are looking after purchase ledger at a company get an awful lot of grief from suppliers about payments. They do become immune to it but a little bit of kindness will always go a long way. In one of my purchase ledger teams was a lady called Beryl who would often put suppliers who had been abusive to her near the bottom of the pile but those few suppliers who were kind to her were given priority if there was a choice of who got paid.
Always be nice to Beryl !