Cash flow is the lifeblood of any business. Understanding and managing cash flow is vital for business survival. For the business owner it is wise to understand your flows. What minimum does your business need each month? Keeping a regular weekly check on your financials will help you see what's due to come in, what's due to go out, what's late and what needs to be chased up pronto. Always keep an eye on your cash flow.
But what happens when another’s inability to pay bottle necks your cash flow? Late, lazy and non payers are quite often the cause of personal and professional stress for a business owner. No one wants to the hassle of having to keep chasing, it's time consuming, and can quickly damage a good working relationship. It is not uncommon for business to be agreed by email only to find that funds are not returned as swiftly as the service you provided.
Having a clear process from the start certainly helps. Sending out a professional looking facture creates a good impression. Are your Terms and conditions clearly set out on your devis/factures? Do they include what is to be paid and when it is to be paid and how it can be paid? Does it include your legal entitlements in the event of late payments when sending out your factures? Are you aware of the process in the event of your T&Cs being breached?
Consider sending your invoices/factures from a dedicated 'email@example.com'
Are you offering all avenues to enable swift payment?
Do you send reminders just before your due dates?
There will be times when you will be in the frustrating position of having to chase your money. In the event of not receiving payment when you have requested, business owners need to demonstrate a degree of strength of character to their business. Business is business. It's never nice having to chase up particularly if you have close relationships with customers. The sooner you can deal with it the better. Action is better than worry.
Once past the due date:
Either pick up the phone or email politely that the invoice is due to be paid by xyz. A telephone call direct may result in some oops, big apologies, an oversight, I'll put the cheque straight in the post today responses.
If payment not received on/before deadline send a reminder in the post, by recorded delivery, with your payment deadline. At this point you are well within your rights to inform them that additional interest charges will apply.
If there is no response to the written reminder by recorded delivery, you are within your rights to instigate <<mise en demeure>> and include your application of interest charges, and again send via recorded delivery.
Hopefully this will be enough to receive your outstanding payment.
What are your thoughts? Do you have a facture process? Have you had to pursue a late payer?