One of the biggest problems that small businesses and freelancers encounter surrounds late or non payment for work and services. This can have an adverse on the business impacting forecasting, investment and importantly cash flow. Without a buffer a business can experience major staffing issues and a problem meeting it’s liabilities.
How can you attempt to late payments from your clients? In our April networking event with the Federation of Small Businesses Paul Daine (Premium Collections Ltd) shared the following steps that every small business can follow.
- Research your customer before trading with them. This can be via Companies House reading or through a company credit or report. Ask for a personal guarantee if you require security.
- Check your payment term options. There is the option to apply interest and late payment fees. Add such terms to invoices. Also, have you thought of an early payment incentive?
- Issue a detailed invoice ( VAT and invoice no, description of services and goods, method of payment accepted )
- Identify problems promptly – be proactive and have a contingency for non -payment. Act early and attempt to talk to creditors.
- If you run out of options a debt collection or credit control company could assist in recovering the debt.
The FSB and altspace coworking space have meetings on the third Monday of each month at 1700 via Zoom. We welcome all small businesses, startups and freelancers.