Debt Collection Made Easy
One of the unfortunate side effects of a recession is the slowdown in bill payments such that the typical small business that just waits for the cash to arrive by itself suddenly finds that it has tens of thousands owing over 90 days. Sending in the debt collector is way too late!
Invoice immediately rather than waiting until the end of the month to invoice, more frequently or take progress payments.
Insist on payment immediately on completion of the job. Take your invoice book with you when working and write out the invoice right then and there. Ask your client for a cheque on the spot after letting them know in advance this is how you expect to get paid.
Discount for prompt payment which is the only kind of discount you should be offering.
Make it easy to pay, offering a variety of payment methods including by instalment. For example, not putting your bank account number on your invoice is plain crazy!
Attitude and consistency. Your customers will take their lead from you so educate them that you won't put up with any nonsense. Monitor who messes you around, add late payment charges, fees, or interest or fire them if they're wasters.
Anticipate problems in advance. Do credit checks, set credit limits, take trade references and personal guarantees, and get terms of trade signed.
As is usually the case, investing in a few simple systems will produce a handsome return here. Why earn your money twice over?
If you have any tax or business queries of any kind telephone 0800 ASK NICK, e-mail firstname.lastname@example.org or use "Contact Us" on www.abac.co.nz. The information in this article is of a general nature and should not be relied upon as a substitute for specific advice.