Get Paid Before Christmas

Niamh McArdle, StubbsGazette, 20th November 2013

There is always intense pressure for a company to collect in as much money before the end of the year. Unfortunately, many companies leave it too late to collect their debts, and end up getting paid in January or February, says Niamh McArdle of StubbsGazette. This may cause your business a cashflow crisis. Many cash flow problems can be averted by the adoption of robust credit management processes that supervise customer payment habits and prevent bad debts by avoiding customers who are at risk of insolvency. StubbsGazette are advising sole traders and companies to adopt the following credit management tips to speed up their cash collection.

12 tips to getting paid before Christmas

1. Set credit limits for all customers. The StubbsGazette Credit Bureau can offer a recommended credit limit for your customer.
2. Make sure every customer has signed up to your terms and conditions and is in no doubt over the agreed credit terms
3. Send invoices immediately after you have supplied the goods or service; don’t wait until the end of the month.
4. Call your customer. Make a follow up call to confirm that all the invoice details were correct and that there will be no problem paying it by the due date.
5. Check later payments daily and chase them up on the day they become overdue, always starting with largest debtors first.
6. Inform late payers that unless payment is received by an agreed date you will charge interest on the overdue amount.
7. Maintain communication with customer. Keep momentum on payment.
8. Try to learn and improve on this process by reviewing every month. Nominate someone to manage the process internally. 
9. If you haven’t been paid by 90 days use a debt collection agency such as StubbsGazette who will chase debtors on your behalf. No collection No fee.
10. If an order looks too good to be true, it almost certainly is.
11. Key to success is making sure that overdue customers put payment of your invoice ahead of any other supplier who might be pressing for payment.
12. The golden rule of credit management is never to give any single customer more credit than you could afford to lose if the customer went bust and never paid