This late payment culture can potentially be crippling for the cash flow of a small business. Take a look at these ideas to protect yourself and your business from falling victim to late payment.
Bank transfers may be your preferred payment process, but it’s not for everyone. Today businesses should take advantage of multiple payment options. Set up a PayPal account, include VISA or Credit Card for payment and put all the details on the invoices or emails. Even consider a small discount incentive for prompt payment.
These terms and conditions, written out and funded by the government, sees firms agree and sign to the code where they ensure that all invoices will be paid within the agreed terms. This code encourages transparency within a business as well as reducing amount of unpaid invoices circulating the country each year.
The late payment of commercial debt legislation (2008) has seen recent amendments in March 2013 where the legislation requires all private businesses to pay within 60 working days with any additional fees to be charged to late payments if the company chooses to do so.
Keep on top of all of your invoices: make it a weekly ritual. Dedicate some time to pay all of your own invoices (you don’t want to be a culprit) and revise all of the pending invoices. If you are waiting for some money coming in, take a note of it, write it in your diary. When the final payment day arrives and you still haven’t received the money, start making phone calls. Be persistent and make sure and speak to the right people, i.e. the company’s accountant or owner. If there is still no payment, then have your solicitor write up a formal letter. Alternatively, you can go to Money Claim Online, where the court can pressure a business to pay debts that are less than £100,000.