Here at Contributor Capital we listen to our clients, we endeavour to respond to their feedback and provide the services that best support their needs. We recognise that running a business can be incredibly stressful but without a doubt the number one cause of stress for any sized business is clients paying late.
Even if, as a company, you are meticulous with budget planning and accounting there is always the risk of a late paying client. An unpaid invoice can cause serious cash flow issues and leave your business in a very difficult position. There may be a perfectly legitimate reason that the invoice hasn’t been paid, perhaps your client is incredibly busy and just hasn’t got round to it yet, perhaps they have their own cash flow issue or have simply forgotten?
Here are our top tips for dealing with late payment;
● Agree terms and expectations at the beginning of your relationship – be clear about the deadlines for payment
● If it works within your business structure, thinking about asking for a deposit once the job is agreed
● Have a standard email reminder set up for late payments so that you don’t have to go through the stress of agonising with the wording every single time
● You could think of having a procedure of charging interest (2% for 30 days late, 4% for 60 days late etc) or a standard “late payment fee” to incentivise timely payment. Again, you would need to negotiate this at the beginning of your relationship.
● If after all of the above you are still struggling and you worry about how this might affect your business relationships, you could think about asking Contributor Capital for help. We provide Invoice Financing to support businesses with cash flow issues, providing a form of short term lending, at a reasonable price. When you raise an invoice, we pay the total to you directly. You pay us back once your client has settled their account. All the stress of your cash flow issue is gone!
Contributor Capital provide financial support to business across Guernsey and Jersey, contact us to discuss your business needs today!