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Many moons ago, I worked part time as a credit control manager to help put myself through uni. I dealt with the top 1000 brands at the time and when I started, there was a lot of bad debt (around 15%) but by the time I finished opening up a can of whupass, it was less than 2%. From the taxi firm owner, to various friends running consultancy’s and blogs, money and getting what you’re rightfully owed is a pain in the bum. Why? Because people take liberties and so where you give an inch, some will take a mile, and others will take ten miles.
Be careful of bending your own rules – Boundaries!
I think that lack of boundaries or letting them be crossed is at the root of many of the issues that small business owners face. An added facet to this is if you’re quite ‘well in’ in the mum community, you may find that some of your clients make assumptions that you’ll be lenient in a ‘You’re a mum too’ or ‘We’re girls in business together’ fashion. I’m all for adapting a little to suit situations but you will find that if you have different sets of rules for all your clients, you’ll become very tangled, very quickly and realise that your money isn’t coming in on time.
Be careful of being ‘too’ chummy to the point where you’re now afraid to ask for money you’re rightfully owed for fear of upsetting the friendship.
If you’ve got to the point of being cautious of asking them why an invoice hasn’t been paid, you know that a line has been crossed.
Also remember that some of your concerns about asking them for the money may not be ‘real’ fears.
They might actually be totally fine about it (and so they freakin’ should be!) but you might over blow the situation in your own mind.
Negotiate – Business is business and actually, your business counterparts respect you for being savvy. When people haggle you down, or want favours, always make sure that offset it with your payment terms. Having long credit terms and getting hefty discounts will have you being stressed out chasing less money than you should be.
If they keep paying really late, change the terms. This is especially the case for consultancy work – No money love, no more work.
Understand how your clients purchasing departments/habits work
One of the things you’ll quickly discover is that there are your credit terms and their payment terms. You may say immediate or 30 days, but for a lot of companies, this doesn’t matter because they tangle you up in their terms, sometimes getting you to sign a supplier form for your ‘details’ where you unwittingly agree to ridiculously long terms. They may use phrases like ‘30 days, end of month’. This means that you could be waiting up to 60 days to get paid. You might find yourself timing your dealings and invoicing with them to reduce the stress of waiting for paying up – ie, don’t invoice a client like this at the beginning of the month!
Always check if a company uses ‘purchases orders’ because if you don’t, and they do, the likelihood is that the first you’ll hear about it, is when the invoice isn’t paid.
If they accept invoices by email, I highly recommend that route. You don’t have to hear any of that ‘lost in the post’ BS. However, do make sure that it’s not in their terms that they need a copy in the post.
Be persistent. If you have had to wait for your money, don’t be afraid to call a week before the payment date they’ve promised to ensure that you’re on the list.
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If youre in england take a look at http://www.inniaccounts.co.uk for online invoicing