In an ideal world, you invoice a client, you get paid and you move on. But what happens when payment is elusive and you can’t quite figure out where you went wrong? Credit control is all about managing any factors that might get in the way of payment, limiting these and making it easier to get paid promptly.
Here are three tips to help you get paid on time:
- Set expectations upfront – When taking on new clients, make sure you have a clear understanding of their payment processes. This can include where to send invoices, what set payment cycles they have and any specific information they might need to be included on an invoice. From your perspective, this is a great time to talk about your payment terms. If you require prompt payment (i.e. within seven days) confirm this is achievable on their end. Put all this in writing and get it signed. A little bit of time up front will save you in the long run.
- Stay on top of late payments – It’s always a slightly awkward conversation to have, but picking up the phone to chase late payments is invaluable. You might discover that the invoice has wound up in the wrong place or has been put aside due to an issue that needs addressing. Having a frank conversation is often the quickest way to sort out any problems. If there isn’t a valid reason for a late payment and you’re several conversations deep, consider charging late fees.
- Get the right tools to do the hard work – As a business grows, so does the number of invoices rolling out the door. Keeping track of payments can easily fall by the wayside, which is why employing the right tools for the job is invaluable. Credit control software will automate the trawling through emails and bank accounts and collate everything you need to know into a centralised resource. It’s a great way to save on time and headaches.
Credit control getting out of control? Speak to one of our accountants for expert advice today.