Anyone who has been in business for a while will know that we are entering the danger zone. The annual period where getting paid is like pulling teeth. Thankfully it is still mid November so there is still time to plan, prepare and cope. The best advice I can give you right now is this- be up front and honest with your customer and ask them, before you start work or provide the goods and services, if they are going to be able to pay on time. Remember- prevention is better than cure and almost every debt we get sent to collect could have been avoided. This is a very difficult question to ask though because it’s scary- we don’t like to think the worst and instead just assume by default that we will get paid. Take it from us though- if ever there was a time they were going to be late, it’s now. The most inoffensive way of asking is this: “Obviously Christmas is coming up so I just want to make sure that you don’t foresee any issues with paying on time?” If they’re offended then this is a bad sign and you should proceed with caution. Don’t feel the need to justify the question though as you should always be hyper vigilant at this time of year. If they convincingly reassure you, you’re good to go but just remind them again of your trading terms. When it comes time to paying, they will remember this conversation and it’s almost certain they will pay as promised purely because they essentially gave you their word. Nobody wants to go back on that.
Finally, what’s also effective is really tightening up your accounts processes from now until Christmas day. Invoice them as early as possible, confirm on the day payment is due, send a reminder at 3 and 7 days past due, and call them on day 8. And don’t for a moment feel bad. There is no one and nothing more important over the next two months than you and your business. Some prep work now will do wonders to your cashflow when it matters.
Cheers guys
You’re not a bank- how to stop your customers from treating you like one.