Ten Tips To Getting Paid Promptly

Many businesses, particularly small ones, suffer from their customers paying them late. I'm not talking about 'bad debts', just slow payers. And slow payment can cripple a business's cash flow.

Here are a few ways to get your money in sooner:

  • 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).

  • Find out when your customer does a check run, and by which date your bill needs to be sent in to meet that check run.
  • Make sure that your invoice contains the date on which the invoice is due - not just 'payable within 30 days'.
  • If you are working to a contract, ensure that payment terms are included as part of the contract that you draw up.

  • Monitor your books regularly (every 2 weeks) and start to remind customers who are just a few days late.

  • 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.

  • When phoning, make sure that you speak to a person who can take action.

  • Don't accept vague statements such as "I'll see what I can do".

  • Concentrate on the biggest debts first - this will help your cash flow.

  • 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".

  • 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.

Kaye Vivian is a consultant with over 15 years of experience in marketing communications serving professional services firms. She also publishes The Legal/Accounting Web (http://www.cloud9.net/~kvivian/html/legal_accounting_web.html), a website with marketing and communications tips for CPAs and attorneys.

Copyright 1998 by Kaye Vivian (kvivian@cloud9.net). All rights reserved. Permission to reprint is granted provided this article is not altered and the copyright notice remains attached.

You may like these other stories...

Here's a CPA who truly walks the walk. On March 15, Frank Ryan, CPA, departed San Diego, California, with plans to be in Ocean City, Maryland, by July 2 to teach a course at the Maryland Association of CPAs’ (MACPA...
When Theodore J. Flynn first joined the Massachusetts Society of CPAs (MSCPA) in 1970, it was a different world and a different profession.  The "Big Eight" were still headquartered in Boston. Vietnam War...
Accountant Rickey Charles Goodrich had it a little too good. Many bean counters would kill to serve as financial guru to the likes of Pearl Jam. Goodrich was hired in 2005, and the following year, he became the CFO of Curtis...

Upcoming CPE Webinars

Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.
Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.