Enterprise Nation

Paul Woodward of PW Credit Services reminds us of our options if customers are unwilling to settle invoices on time. Are you ready to go knocking on some doors?

Chasing cheques

The good news is that most of your customers will pay you. Send them an accurate invoice, promptly, and they will pay it. Make the due date very clear. If your terms are ’14 days’ make it obvious when the 14 days start such as 14 days after invoice date or delivery date.

The not such good news is that some don’t pay. So the invoice is overdue, what next?

Remind them, by letter, telephone, e-mail, fax, text message or, if it’s close, go knock on the door. The really organised will have made a call before the due date; a courtesy call to check everything is OK and to confirm payment will be made by the due date.

A telephone reminder is best. This will help identify if there is any problem with the goods or services you've provided. If the customer can't make payment in full, instalment payments are an option. If you're not comfortable phoning to ask for money then any other method is fine. A text message asking for payment is still a bit of a novelty so may be worth a try. Whatever you do, keep a record.

The first reminder is just to say the invoice is overdue and can they please now pay or let you know if there is any dispute. Follow-on reminders need to get a bit tougher and outline what will happen if payments isn't made by a certain date. These options are:

• sorry, no further orders until this invoice is paid
• the debt will be passed to a debt collection agency or
• legal action will be commenced

A final reminder, definitely by letter, will tell them that 1, 2, 3 are now happening.

You'll want to avoid falling out with clients at all costs but bear in mind it’s your money and your suppliers will be asking you to pay so the cash needs to flow.

Paul Woodward

• PW Credit Services