Thursday, 11 April 2013

It's All About The Money Money Money

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This image seems particularly appropriate today after I read a piece in Business Money Magazine saying that 1 in 10 SMEs are owed around £50,000 in late payments.

Apparently, around £30.2bn is owed in late payments in the UK and small businesses seem to be being hit the hardest.

Most small business owners report that large companies frequently ignore payment terms and basically pay up when they're good and ready, banking on the fact that small businesses are unlikely to have the staff or money to spend chasing for payments.

And it's having a huge impact - 23% of companies report that they're concerned about the impact that late payments will have on their business.

It sucks. Totally.

How many of us have been in the position of having done some work, submitted the invoice with payment terms on only to have it ignored? How many of us have been given the "we can't find your purchase order" or "we don't have your payment details" excuses despite the fact that we've got copies of paperwork clearly showing all of this?

So, here are a few tips to help you get your money:

  1. Include your bank details and payment terms on every invoice that you submit and make sure they're so clear no-one could miss them. Also include the date as clearly as possible.
  2. Submit invoices to a named person, not a general 'invoices@' account. Always get a read receipt or call to confirm all is ok.
  3. Start chasing for payment the minute a payment deadline is missed.
  4. Try and keep payment terms down - 7 or 14 days is way better than 30 days (which can then stretch to 50 or 60 before you finally see your money).
  5. Be polite but firm. Ask for a date when the payment will be made and be prepared for all the old "you've missed the payment run" or "the person needed to sign off your invoice isn't in this week". Keep on asking for a date.
  6. A good first step for an overdue invoice is a statement - it list the invoice number/s outstanding and amounts. It allows a company to highlight any genuine issues to you and it makes you look professional.
  7. If you get the 'cheque is in the post' excuse ask for the date of the cheque, the cheque number and the address to which it was posted. 
  8. Keep dated notes of everything you've submitted, asked and been told should anything be needed further down the line.
  9. Keep your focus on the accounts department for payment - it limits the chances of souring the relationship with the people you've been working for but if you're really not getting anywhere, go back to your original client.
  10. If it comes to it, don't be afraid to use the law - it's there to protect you, not them.
You deserve to get your money because [hair toss moment] you're worth it.

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