Late paying clients can have a damaging effect on the cashflow of small businesses and there are cases where little could have been done to prevent this happening. There are however ways to reduce the risk as we will explore in this blog.
One recent study into small business cash flow problems found that the biggest cause of those problems was late paying clients. Often payments were more than a month overdue, which can put businesses under considerable pressure.
This highlights the need to act swiftly if as a business owner you sense that clients may have a problem making their payments.
The first thing to do to make sure you get paid on time is to invoice promptly. If a client pays you monthly or on some kind of retainer agreement, make sure that you invoice on the agreed dates rather than allow things to slip.
Your invoice should include terms and conditions which clearly state when payment should be made and the consequences of late payment if the deadline is missed. The latter should certainly apply if the payment deadline has passed.
You should also make it easy for the client to pay and a range of options should be given so that you can at least say every effort has been made in this regard.
If you find that despite all your best efforts your client is unwilling or unable to pay you, then you can hire there services of a debt recovery agent to help you.