10 ways to get paid more promptly

Many businesses, particularly small ones, suffer from their customers paying them late. I'm not talking about 'bad debts', just slow payers. Credit control is a key business issue. And slow payment can cripple a business's cash flow. Here are some ways to get your money in sooner:

1. Always find out exactly what information your customer's accounts department needs on your invoice - and make sure that you comply to the letter (e.g. their order number, date of order etc).
2. Find out when your customer does a cheque run, and by which date your bill needs to be sent in to meet that cheque run.
3. Make sure that your invoice contains the date on which the invoice is due - not just 'payable within 30 days'
4. If you are working to a contract, ensure that payment terms are included as part of the contract that you draw up.
5. Monitor your debt book regularly (every 2 weeks) and start to remind customers who are just a few days late.
6. Chase slow payers by telephone rather than letter (at first) and note the date that they have promised payment by. Chase again by phone if they have not paid on time.
7. When phoning, make sure that you speak to a person who can take action.
8. Don't accept vague statements such as "I'll see what I can do".
9. Concentrate on the biggest debts first - this will help your cash flow.
10. When sending out letters (if the phone calls don't get results) don't make it obvious that the letter is part of a standard procedure (e.g. don't put "1st reminder" or words like that). People will then just wait for the "2nd reminder".
11. Don't let late payers get too far behind before considering taking legal action. Before you do this, ask yourself "Do I really need this customer?". If the answer is 'no' then don't hesitate to bring your lawyer or debt collection agency in.

Did I say 10 ways? Well, here we always deliver 10 per cent more than we promise! Do you?

"I had three accounts which were fourteen months overdue and our accounting department was ready to write them off as bad debts. I decided to give it one more try over the phone and talked directly to the person responsible for writing the cheques.

In all three cases I reminded them that they had already sold my product and used the money for their own business while I was still waiting for a cheque. I then asked each of them to admit to me "this is not fair". Once they actually said the words themselves I received the cheques within seven days. Make them say out loud that not paying you is "not fair". When they hear it from themselves they cannot ignore it!"

Another contribution (popular subject, this 'getting paid'!) comes from Lenny Laskowski, President of LJL Seminars and author of "Dynamic Presentation Skills for the Business Professional". Lenny writes:

"I run a seminar & consulting business and one thing I have done to dramatically increase my business while at the same time get paid up front before I provide the service is to offer a 10% discount if paid in full before we start. I also offer other discounts for multiple bookings when booked at the same time. I don't give flat out discounts; that devalues your fees. My discounts are purely a reward for paying me up front. By paying me up front, they receive a discount and I receive use of their money."

Becky Noel of Global Travel emailed us with this advice:

"We have $5,000-$50,000 per sale. I say to the client, would you prefer to pay 50% on issuing the purchase order with remaining 50% due 30 days after delivery; or Would you prefer full payment due on delivery of goods? I always give a client two options. If he wants a different one he will suggest it. We used to have a real problem with payment (we billed 30 days after delivery) until I came up with the new payment schedule."

I had trouble designing invoices. I looked at a utility bill and realized that, like them, I could get paper with a perforation going across two-thirds of the way down. (My firm publishes a newsletter and I had the printer perforate a ream of paper.)

Now my invoices say to keep the top two-thirds and return the bottom third with payment. I also had the perforation put on a different color paper. I put a sheet of the colored paper and regular paper in my printer and print out two copies of my invoice. The white copy is my file copy.

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