Whatever the size of your business, ensuring payments get handled quickly is crucial. Managing your invoices and incoming payments can be time-consuming and there are some people who hide from it; but missed payments will affect your cash flow and could put your business in jeopardy.

Some of us find asking for money uncomfortable and then, of course, the next issue is how you might handle things when the payment doesn’t arrive. It’s essential to find processes which work for you.

For this topic, we’ve spoken to Your Business Matters member Kishani Navin, a solicitor specialising in Dispute Resolution at K4 Law. These are Kishani’s top tips to getting paid.

Invoice Payments on Your Terms

1. Be Clear and Consistent

Whatever the work you are undertaking ensure you are clear with your client or customer about the:

• Payment Amount – is this a single amount or multiple payments.
• Payment Terms – how long does the payer have to pay, are there penalties?
• Payment Methods – make it simple, tell them what is available.

These should be communicated in plain language anywhere your client is going to need to see them – your proposal, contract, terms & conditions, invoice.

One way of making sure you don’t struggle to secure payment is by getting paid up front.

While this can be an obvious solution for you as the supplier, it’s important to be aware that a customer or client will need to feel confident before giving you money. Consider whether you should ask for the full amount or a deposit and think about what you can offer your clients as a guarantee they’ll be happy with the work.

If you feel up-front payment would work in your situation, build it into your payment terms.

2. Plan Your Next Moves

Whatever diary or planning system you use, ensure you identify your next steps so you don’t forget to follow up payments.

Once the invoice is sent, diarise the due date and have a clear process for following up. Check if the payment has been made and, if not, contact your customer reminding them payment is due.

Think about your own preferences and the outcomes you want to identify a set of steps which will work for you, perhaps your first reminder will be a gentle email followed by a phone call in a couple of days if no payment has been made.

Having reminders will make the process easier, and most customers won’t object to being prompted perhaps just needing a nudge to organise themselves.

3. Is Outsourcing the Answer?

It may be you feel you aren’t making progress chasing overdue payments. Whether you are unable to get a response or have concerns about damaging your relationship with the client, now might be the time to consider outsourcing the problem.

A good first step would be a debt collection agency. For a small price – a percentage of the recovered debt – you can hand it over to a third-party. This is a relatively cheap way of dealing with the issue and will only require payment for successful completion.

A Dispute Resolution solicitor is a more expensive option and will only be necessary if your customer is disputing the invoice payment – perhaps questioning the completion or quality of the work. In this situation, consulting a solicitor for advice may be your only option.

4. Charge Interest

As a business, it is your right to set interest charges on late payments and these can be set at your discretion.

If you intend to charge interest on late payments, you will need to ensure these are clearly communicated to your customer. Include appropriate instruction everywhere your payment terms are mentioned – your proposal, contract, terms & conditions, and invoice.

When, or if, you follow up on your terms to claim these interest payments will – again – be at your discretion. Having them clearly visible however is a clear incentive to clients to ensure swift payment.

5. Trust Your Gut

If you have any indication that a client will be awkward or difficult to deal with, trust your instinct. Very often, customers who try and negotiate fees or question terms of service are clients who will cause you more stress.

Be aware of your own concerns and don’t dismiss any misapprehension – consider your options when deciding if you want to work with someone.

Getting Invoices Paid – Keep it Simple

Many of us worry about chasing payments, these five tips should give you some clear, practical steps which you can follow up yourself.

If you need further help, talk to someone who has experience in this area – like our own resolution expert Kishani.

Within Your Business Matters we have experts from all sorts of areas who offer support and collaboration opportunities to help you build a stronger business. We also offer clear practical support as Added Value within our networking meetings.

If you’re looking for a community and structure to support you in your business, take a look at our networking meetings and come along. We’d love to see you there.