Businesses do not go bust because they lose money – they go bust because they run out of cash!
We all know that cash is king in business so how is it that many SME businesses not use a proactive credit control system. Is it because they feel that they may upset or even lose a customer if they chase debt? After all a sale is not a sale until it is paid for, so here are 7 steps to make sure you get your money on time.
- 1. Send your Terms & Conditions of business to your customer before you do any business with them.
- 2. Refer to your T&C’s with in any quotation or proposal.
- 3. Send your invoice/s by email and/or post as soon as possible to comply with your T&C’s/Quotation/Proposal showing the due date for settlement.
- 4. Follow up the invoice/s within 3 days with a phone call to your customers Accounts department – note who you are talking to – to check:
- Have they received the invoice/s?
- Is it correct? If not this gives you the opportunity to discuss and address any issues and, if necessary, send an ammended invoice.
- If correct make the statement along the lines of “that’s great so you can confirm that we will receive payment of the full amount by the due date?” Again this gives you the opportunity overcome any objections that may arise and if so remind them of the T&C’s
- 5. If the phone call in 4 above is made over a week prior to the due payment call again the day before payment is due to confirm that it is being sent.
- 6. On the day following the due date, if the payment has been made send a thank you e-mail; if the payment hasn’t been received phone them again stating that you haven’t received it and ask for confirmation that it has been sent as promised in the previous calls; this can be due to delays in the banking or postal systems. At this point let them know that you will call them again if you haven’t received the payment within the next 3 days which gives tham the opportunity to re-send or even send it for the first time.
- 7. If payment still isn’t forthcoming in that time phone again with confirmation email stating what action you will be taking, dependent on who the customer is and their importance to you, such as putting the customer on your “Stop” list or implementing your debt collection process.
These actions will demonstrate to your customers that you have a process and, if followed, you will find that you get paid in preference to other suppliers who do not start chasing payments until after the due payment date, only to find that the invoice has a query on it, or that you have missed the cheque/BACS run.