Tips and advice designed to help speed cash flow and ensure company invoices are paid, minus hassle or delay
Attention to detail and persistence are the keys to managing credit control and making sure your invoices are paid with the minimum of aggravation and delay.
Small businesses across the UK are owed billions in overdue invoices at any one time. If you want to beat the debt game, become the boss of credit control and have hassle-free cash flow – then follow these top tips and essential advice.
Focus on your credit control
Start with some best practice organisation and get your invoicing procedures sorted up front to avoid problems further down the line. And then, be prepared to doggedly chase unpaid debts. Without exception!
Kim Redwood-Lee tells business clients the most important rules are:
Have a system and stick to it. Invoicing is all about correct procedure and doing the right things without fail.
Agree an approach to unpaid invoices and don’t waver. Remember, firms always pay the chasers first. Don’t be the ‘nice’ guy who slips to the bottom of the list.
Above all she stresses: “Get ahead, instead of letting the worry loom”.
Oscar Fairchild’s dedicated credit control service is designed to give you help to speed the payment of sales invoices and better manage customer credit, ensuring your cash flow runs smoothly.
But if you are managing credit control yourself as the owner of a growing business in Essex, Hertfordshire, or London, then you need to start by invoicing customers promptly and including the key details.
Invoicing the professional way
Always make sure your invoices clearly contain:
- Your customer’s full name, with the company’s full name and registered address
- Your payment terms, such as 30 days
- Simple and accurate details of the work you have done
- Their bank details too if you can get them
This must all tally with information agreed in your quote for the job or negotiated in a contract if you put one in place; and will all work in your favour should an unpaid debt unfortunately lead to court proceedings or enforcing a County Court Judgement for outstanding money.
You’ll want to avoid that, as cash flow struggles can have knock-ons for you in terms of paying staff, suppliers, or even yourself so you stay afloat.
Which is why you may decide that professional credit control help from qualified bookkeepers and accountants is a better route for you, especially as they will no doubt use automated software to invoice correctly – and possibly collect payments online from your clients.
Chasing down non-payment of invoices
There will come a time when a client is not paying an invoice, and you need to have an approach to chasing debts that’s right for you and your business. Not everyone’s style is the same, but there are some useful ground rules to follow.
It’s a balance between staying on good terms with long-term customers, and not getting taken for a ride. Waiting too long and being too nice could see you drop to the bottom of their payment pile.
Being firm and fair is a good starting point; and customers will understand and respect a consistent position. Diary payment dates and chase politely, but don’t be afraid to take serious steps if you have to.
That might mean getting a solicitor to write a debt recovery letter; and there are plenty of debt recovery solicitors that will take matters further if needed for a fee, which can probably be offset by compensation you can add on to unpaid amount.
Everyone wants to avoid having awkward conversations with clients about finances, let alone having to take legal action. But always be prepared to go that far. Having a reputation for pursuing unpaid debts is no bad thing in your local business world.
Great credit control sees you get paid faster
Poor cash flow and a lot of unpaid invoices can see the stress and anxiety build up – which is why smart business owners bring in specialist bookkeepers and accountants like Oscar Fairchild to handle their credit control for them.
While they get on with credit checking potential new customers, and running regular business debt health checks, you can get on with building your client base and your turnover.
Do negotiate final payment terms with customers, and add upfront payments or deposits as well, plus a regular payment schedule in your contract terms. It can all help.
But you may already be convinced that working with a bookkeeping and accountancy partner like Oscar Fairchild makes perfect sense for your growing business, letting them handle those key areas – invoicing detail and pursuing unpaid debts sooner rather than later.
About Oscar Fairchild:
Oscar Fairchild (incorporating Redwood Clarke since 01.09.18) is an Association of Accounting Technicians (AAT) qualified accountancy & bookkeeping practice with offices in The City of London and Billericay, Essex. Offering a wide range of services including Self-Assessment Services, Annual Returns, VAT Returns, Credit Control, Payroll, Auto Enrolment Pension and Management Account services to high growth businesses across London, Essex and Hertfordshire.