Clients and customers paying late are one of the more common and widespread threats to small businesses across the UK. Having to deal with payments for services rendered outside of agreed terms can jeopardise the cashflow and very success of an operation, particularly for those where a large expense is incurred in the initial provision of the service.
It’s also a regrettable part of life as a business owner. We all have good and bad clients in some amount and learning to deal with those who have a tendency towards delay will help safeguard your business and its future. At times, it can be best to tactfully work around the issue and to build in greater security in your business not by ditching the client, but by handling them smarter. Let’s look at how.
Streamline Your Invoices
Hundreds of thousands of invoices every month are delayed. Many studies go as far as to state the majority are paid outside of terms! The good news is that while chasing payment can be difficult or intimidating, you have more control than you might think.
Thirty-day terms? Largely a thing of the past. That length of payment is a throwback to days where snail-mail was a more regular occurrence, necessitating a longer payment period. In a digital world, more can be done faster.
If you’re doing a top job for your clients and are keeping them happy, there is no shame or loss of image in discussing shorter payment terms with them directly. A week is perfectly realistic in the digital age we now live in.
You’ll also want to make sure that your invoices are sent out promptly. It’s obvious to say, but that week deadline you’ve arranged is only from the date of receipt! You won’t get away with sending an invoice later when it’s dated prior. Software can help in this department, making your life easier through an actual credit control process.
Have realistic Forecasts
With cashflow being critical to many a small business in the UK, learning to forecast your monthly income is vital. It’s a challenging task and experience plays a part in becoming accurate, but it’s hard to place enough emphasis on how important diligence is in this department.
Taking a regular stock of your sales and outgoings will help you create a conservative forecast that has some durability built into it; you don’t want to cut things too fine and find yourself in a demanding situation! Over time you can learn to play with the forecast to maximise your potential for profit from periods of growth, but it’s best to start safely.
Prepare as a Priority
This advice is hard earned and honestly offered to you. Don’t procrastinate when it comes to cashflow! Managing your invoices and accurately estimating your comings and goings are best done in advance. This is mainly to avoid stress and fragility in your business model, but also to lower stress. There is a distinct sense of well-being in having your basic administrative tasks handled. As business owners, we can all relate to the importance of maintaining a clear head.
Research Your Finance Options
If your business needs to have an injection of capital to continue or to take advantage of anopportunity in growth, it’s likewise best to be prepared ahead of time. This will help you react fluidly when the time comes to decide, as well as avoiding pitfalls from some lending organisations. Banks are notorious for taking a little longer to decide whether to offer finance; don’t let yourself be caught out by the administrative process of another organisation!
With your research done and business analysed, you may decide to take a loan. If this is the case, contact us without delay. Our team are experts in assisting you to find the capital you need to succeed. We look forward to hearing from you!