Expert Guide to preventing Late Payment in 2024
Expert Guide to preventing Late Payment in 2024
No matter the size or scale of your business, you expect all of your invoices to be paid on time by your clients.
After all, your staff will have spent lots of time and resources providing the service to the client in the first place.
The occurrence of late payment is one of the most common headaches that businesses face and has shown no signs of improvement in recent years. Preventing late payment is always better than a cure.
It has been reported that one in three (30%) businesses has seen late payment of invoices increase over the last three months.
A disappointing statistic for any small businesses that are trying to thrive, especially after the financial hardships caused by COVID19.
Not being paid on time can have an impact on a business’s cash flow, and can mean the difference between surviving or going under.
Changes to an organisation’s credit control process can help with avoiding late payment and increase the chances of getting paid on time.
Top Tips for preventing Late Payment from Clients
All business owners should have the knowledge of how to prevent late payment from clients in their arsenal.
As such, our commercial debt recovery specialists have produced this helpful guide to prevent this from happening.
Get the client to pay upfront
The first, and most obvious, step is to have your clients pay for services before they receive them.
There are many ways that online payments can be made, with the feasibility of using debit or credit cards.
Whilst it is more common for businesses to pay afterwards, as per normal invoice procedures, this is a good way of getting timely payments.
If you have a positive relationship with the client in question, they should have no issues with adapting to this change.
Conduct a credit check on your client
A standard practice in every business should be to carry out credit checks on any new clients.
The reason for this is to give an indication of whether or not they are in a good financial position to pay.
Credit checks will provide information on any late payments, outstanding balances, bankruptcies etc.
Keep track of invoice payment due dates
Monitoring when invoice payments are due is a good way of cracking down on late payers.
Most credit control teams will have an automatic system that notifies both the business and client when an invoice is due.
When both parties are made aware, this will reduce the common excuse of the client not knowing when to pay.
Outline payment terms and conditions
Credit terms and conditions are used in every industry to help get the client or customer to pay on time. They can be pivotal in preventing late payment.
This document is to be signed by both businesses and outlines when the money is due, how much and any late payment fees.
Payment terms will dictate that the client has 30 days – 90 days (depending on the relationship) before it turns to bad debt.
Use accounting software
There are many great accounting software apps and packages available these days. Services such as Quickbooks and Xero can help you manage your cash flow and are helpful in preventing late payment.
Obviously they cannot always prevent late payment but they can go some way to minimising the risk. Dealing with unpaid invoices on accounts software is where Federal Management can help.
Preventing Late Payment – Instruct a Debt Collection Agency
It is no secret that, in some situations, preventing late payment is simply not an option.
When this happens, we recommend you contact a commercial debt collection agency such as Federal Management.
We have helped businesses recover millions of pounds worth of late payments since 2004.
If one or more of your clients are regularly leaving payments overdue, contact our debt collection experts today.
Avoiding Late Payment in 2024 – Frequently Asked Questions
Our client has not paid for goods or services, what should we do?
The first thing to do when goods or services have been left unpaid is to contact your client. If they fail to acknowledge this, the best method is to use a commercial debt collection agency.
Who is the best commercial debt collection agency to use?
There are hundreds of agencies in the United Kingdom alone, so it can be hard to choose the right one. In terms of success and cost, Federal Management is by far the leading solution.
What is the commercial debt collection process?
You will provide us with all information that is relevant to the debt collection case, and we will access the chances of success. For example, in some situations, the cost of debt collection may be more than the money that is owed.
How much will it cost to recover a business debt?
The cost of business debt recovery will change with each individual case. Our friendly experts can provide you with an accurate price once we have investigated the information you provide.
I have not been paid by a client overseas, can you still help?
Federal Management can provide debt collection services on a local, national and international basis. Throughout our long history, we have produced a worldwide network of specialists to achieve this.