[vc_row type=”in_container” full_screen_row_position=”middle” scene_position=”center” text_color=”dark” text_align=”left” overlay_strength=”0.3″ shape_divider_position=”bottom”][vc_column column_padding=”no-extra-padding” column_padding_position=”all” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” width=”1/1″ tablet_text_alignment=”default” phone_text_alignment=”default” column_border_width=”none” column_border_style=”solid”][vc_column_text]Late payments are a huge problem for businesses, especially SMEs, affecting cash flow and expansion plans. While the standard 30 day payment is used by businesses across all sectors, research suggests that on average, companies don’t pay their invoices until almost two weeks after their deadline and for some industries, it can far exceed this. Late payments don’t have to just be an accepted part of business, there are steps you can take.
Make payment terms clear from the outset
The first step to reducing late payments is to review your contracts and agreements. They should be very clear and transparent when it comes to timescales, with deadlines noticeably displayed on all invoices and communication relating to the payment. It cuts out the chance of clients being unclear or confused about when they should be making each payment by.
Carry out credit checks
If you’re finding that your business is frequently blighted by late payments and it’s having a detrimental effect on your operations, it may be worth investing in credit checks. Much like personal credit checks, the corporate option will show you how likely a business is to accumulate debt, as well as highlighting if they frequently pay late to other creditors.
Chase late payments
With so many other business areas to focus on, chasing late payments can fall down the list of priorities but it’s an important step. In some cases, late payments occur because the task genuinely slipped the mind of the professional on the other side, a gentle reminder can be all it takes to secure the funds.
Offer incentives and penalties
Some businesses find that offering an incentive, such as 5% discount, for prompt payment can actually save them money in the long run and it may be worth considering. In addition, make sure you use penalties or fines for late payments too, these should be clearly conveyed and a part of your terms and conditions.
Build a rapport with customers
Good working relationships can significantly reduce the frequency of late payments, so taking the time to build a report with your regular clients can make a big difference – it’ll also boost other business areas too,
Seek professional advice
When all else fails, there is the option to seek professional guidance, whether a legal firm to draft a firm letter that sets our potential consequences to a debt recovery specialist, it can bring you peace of mind to know that an expert is on the case. From drafting contracts that give you protection against late payments to providing critical support when you’re seeking to recover bad debt, our team at Audley Chaucer can help you.[/vc_column_text][/vc_column][/vc_row]
