Small Business Checklist: Getting Payed

As I mentioned before cash-flow is everything for small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer-, Professional-, Personal businesses, getting payed on time is one of the ways to keep your cash-flow up:

1. Ask for your money - many people don’t do that because they are embarrassed to do so, in my opinion some one who is chasing payment is looking after his/her business and that makes you look more professional.
2. Offer discounts - offer a 2% early payment discount, if payment is received within seven days.
3. Statements early - some businesses or clients only pay after they had a statement, make it easy for them, sent an email statement with payment (online) option.
4. Make it personal - know who makes the payments, get to know them and take a interest in their lives, ask to be on the next payment run.
5. Go and collect - if calls don’t help pay a visit and ask for your money in person.
6. Call at home - find out where the responsible person lives (Companies House), that will get results, short of court action.
7. Lawyers - many firms of solicitors offer credit control services, only use it if you done all of the above.
8. Factoring - is a service where you get a percentage of your invoice days after raising it and the factoring firm chases for payment, but is costs. Make sure you compare payment terms, cost and customer exclusions.
9. Court - take non-payers to the small claims court, you can do it yourself, it is not that difficult.
10. Garnishee Order - if your customer is going bust, get a garnishee order from a court and get payed by your customers client. Only works if your goods and services have been sold on.
11. Why Bother Debts - don’t waste your time with small amounts, it often takes longer to chase small debts and is annoying. Write it off, move on. If the “customer” comes back - sometimes they do - double the price and make them pay up front.

There is no excuse for not chasing your money, if you don’t want to do it yourself, get someone to do it for you, like a virtual assistant - remember whoever screams the loudest will get payed first.

UPDATE Aug 16th: 12. Invoice Discounting - sell individual invoices as and when needed. Great comment by David Banfied, see below.

For more of my checklists see the Small Business Checklists category and as always please add to my list with your comments, tell us what works for you.

6 Responses to “Small Business Checklist: Getting Payed”

1. DAVID BANFIELD
   http://www.interfacefinancial.com
   
   Said on August 16th, 2007 at 2:27 pm

   We are also passionate about helping small businesses succeed. Another option alongside of factoring is ‘invoice discounting’ rather than entering into a long term contract to factor all of your receivables why not just sell individual invoices for cash as and when needed. It’s a ‘use it as you need it’ service.
   The service works in all manufacturing and service industries including construction and construction related areas.
   Because it is use it as you need it, one is able to control the cost and make it a very effective and most importantly a very cost effective method of improving cash flow as and when needed.

   David Banfield
   President
   The Interface Financial Group

2. Stefan Töpfer
   http://www.winweb.com
   
   Said on August 16th, 2007 at 2:41 pm

   Thank you David for your additional point.

3. THE SMALL BUSINESS BLOG » Blog Archive » What do you mean by credit control?
   http://www.sme-blog.com/small-business/what-do-you-mean-by-credit-control
   
   Said on October 14th, 2007 at 7:43 am

   […] Small Business Checklist: Getting Payed […]

4. Wilbert
   
   Said on April 23rd, 2008 at 12:07 am

   Hello

   Question: How can a business retreave money owed by a customer who refuses to pay their bill? I know small claims but what law and where to find it protects business from customers?

5. Zac Davis
   http://www.ocflink.com/
   
   Said on May 9th, 2008 at 10:47 pm

   I think small claims court would be a very simple way to get the non-paying client to pay. People are always too scared to go to court.

6. Stefan Töpfer
   http://www.winweb.com
   
   Said on May 9th, 2008 at 11:23 pm

   Good point, Zag. Thanks for the comment.
   – Stefan

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