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Numerous disputes can arise between supplier and client. This can range from customers claiming that the product arrived too late for them to use to the shipping address being completely wrong.<\/p>\n
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\u201cFor some customers, there\u2019s always something that\u2019s not quite right,\u201d says Vollbehr. \u201cMake sure that you get all the details of the order and delivery in writing. Taking orders over the phone can be risky as you may not be able to cover yourself.\u201d<\/p>\n
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This is probably the most honest of all the reasons you\u2019ll be given for not being paid. Providing an extension or a payment plan are the most common solutions to this, but make sure you get this all in writing. Never casually agree to late payment verbally.<\/p>\n
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\u201cNo one wants to send the bailiff around, but if this happens the first time a customer buys from you, he\u2019s cheated you,\u201d says Vollbehr. \u201cIf he or she is a regular customer, you can understand it a bit more. As long as it happens as a one-off, you can be a bit more lenient.\u201d<\/p>\n
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Longer-term, you need to do due diligence on all your customers. Know who you are dealing with \u2013 get all of their details and continually check on their financial health. Don\u2019t just assume that they will always pay you.<\/p>\n
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\u201cA credit check can cost as little as $3 \u2013 there\u2019s no excuse to not to it as it\u2019ll save you so much down the track,\u201d says Dun & Bradstreet\u2019s Christian. \u201cMake sure you track customer history and have a solid accounts receivable process. Use a good system like MYOB.\u201d<\/p>\n
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Sometimes, a customer will want to pay for 10 invoices at once, rather than one at a time. This is fine if they do it up front, but problems arise if they conveniently forget one invoice in the lump sum they give you.<\/p>\n
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Combined payments can also cause cashflow issues that can turn into a major headache for your business. Most of the time, small firms are just happy to receive the money, but if this arrangement contravenes your purchase agreement, don\u2019t be afraid to decline the offer.<\/p>\n
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Some customers can try horse trading if they are unwilling to promptly part with their cash. They will attempt to convince you to buy their products or services before they pay for their order.<\/p>\n
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There is no obligation for you to do this and it is, in fact, often good practice to avoid buying from your customers.<\/p>\n
\u201cThis kind of request is absolutely no reason to delay payment to you,\u201d states Christian.<\/p>\n
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Companies can try to brush aside small firms by making them feel unimportant compared to other suppliers and large customers. The truth is that no customer should be too busy to pay up on time.<\/p>\n
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\u201cThe simple response to why they should put you first is that you have a 30 day payment term and that you require payment to honour that,\u201d says Christian.<\/p>\n
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In general, most late payment problems can be eliminated by good invoicing procedures and tenacious chasing of debts.<\/p>\n
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\u201cAll of these excuses show that administration is the biggest hurdle for small businesses \u2013 but it\u2019s a hurdle they\u2019ve created themselves,\u201d says Christian. \u201cYou need to ensure there are no excuses \u2013 invoice to the right address, spell out the terms of trade and get on the phone straight away if payment isn\u2019t received.\u201d<\/p>\n
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\u201cDon\u2019t wait until the end of the month, when you\u2019ll have to scramble around for the cash. If you\u2019re the first in the queue, you\u2019ll be the first to be paid.<\/p>\n
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\u201cYou should issue invoices promptly. So man firms wait a few weeks after the goods have been shipped.\u201d<\/p>\n
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\u201cYou should do it straight away. Many small businesses don\u2019t do this because they don\u2019t understand the value of cash \u2013 larger firms understand that they shouldn\u2019t be acting like a banker for their client.\u201d<\/p>\n
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If verbal and written reminders don\u2019t work, don\u2019t be afraid to use a debt recovery service.<\/p>\n
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\u201cGenerally, businesses should do this within 60 days, if the payment term is 30 days,\u201d says Christian. \u201cSmall businesses used to think that they were too small for debt collection services, but we\u2019ve seen a significant increase in the use of debt collection in the last 12 months.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
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