It’s a commonly asked question from many in business. Good quality work is done and delivered on time, on specification to the customer but still the bill doesn’t get paid. It leaves a bad taste in the mouth and can sour what should be the start of a great working relationship but there are a series of steps which if addressed can significantly increase your success in getting paid.
- Set it out in writing – The use of professionally written terms and conditions and legally binding contracts that set out the invoicing and payment process will remove any ambiguity right from the start and will give you a sound place to start from should you need recovery action in the future. Don’t start any work until you have received a signed contract back or you don’t have a leg to stand on!
- Quotations – Issue a quotation for the work you are to undertake ensuring that the quote has an expiry date and where there are possible variables, set these out clearly so you can revise the quote if necessary. Again, don’t start any work until you have received an acceptance to your quote to protect yourself.
- Extras – Identify all extra works that are outside the original quotation and obtain pre-approval to the revised price before additional work is done. No-one likes being presented with a bill for extras that they weren’t aware of and this removes any arguments after the event.
- Satisfaction – Always get the customer to sign-off that the goods have been received in good order (a dispatch note or similar) or that the service has been delivered to the right specification & quality (a snagging list or feedback sheet). This will confirm that there were no issues at the time of delivery.
- Bill – A customer can’t pay you if you haven’t sent to invoice, so bill on time in the agreed format and with all the supporting paperwork needed to obtain payment. Remember to prepare your invoice with Purchase order numbers and job references as these can delay payment. And finally, send the invoice to the right person & place. Your day-to-day working contact may be in a completely different building to the accounts department.
- Enforce – If you have gone to the cost of professionally written terms and conditions then make sure you enforce your payment terms by chasing in accordance with them. There is no point stating ‘payment within 14 days’ if you do not start to chase until day 30. Have a clear credit control policy with standard letters, which you stick to, to chase the debt in a professional and consistent manner.
- Go legal – If having worked through your credit control policy there is still no payment then take legal action to collect the debt. Again, there is no point in following all the above steps if you are not prepared to recover what is rightfully yours.
- Payment in advance – If you are in any doubt as to the integrity of the customer or their ability to pay then request a proportion of the fee in advance, and perhaps stage payments for bigger jobs. If the customer refuses or states that they are unable to pay in advance, it begs the question how would they pay anyway?
If you would like to know more about how these steps can be used or how other solutions such as Invoice Financing can help you to get paid on time then please contact me Jon Lister or 01302 752700 or at firstname.lastname@example.org