We all have clients who pay and some who delay... but the clients who extend your credit terms extensively can be costly to your business – not only because work completed hasn’t been paid for, but for man hours in chasing the payment due...
Cash is, and always will be, King!
In any business, without good cashflow, it cannot run efficiently or plan for growth, so if you’re giving customers credit, then its essential they play their part and pay the invoice to your agreed business terms.
Some useful tips to ensure Good Credit Control
Always agree payment terms before you begin to trade – this will save those awkward conversations if your customer doesn’t pay you on time... everyone knows what’s expected before you begin working with each other.
Keep all bank transactions up to date – you wouldn’t want to chase someone for payment when you haven’t checked your bank account!
Keep in contact with your customers – build a great relationship with them, it’s not all about work... it’s about relationships... people are less likely to take advantage of you if they know, like and trust you.
Be consistent – use the same terms for all your customers – it’s just easier to remember – business is busy enough without trying to remember what you agreed with who... don’t make business complicated...
Use Proforma Invoices – if you get a particular customer who gives you the run around, remember you don’t have to supply anyone on credit terms if you don’t want to – it’s your business, you can chose who to work with and on what terms... so if they want to place another order, then ask them to pay up front before you begin work for them.
You should not put your business at risk because other people are not as good as you for controlling their finances – all businesses are in the same boat with cash flow – so controlling your credit control will give you piece of mind, and give you the funds and the focus for business growth.