Being paid for the goods or services you supply is the ultimate goal for any business. It is after all, why we trade and enables us to carry on trading. Sometimes however, it can feel like running a gauntlet when it comes to collecting your payment and doing a good job does not seem to be enough to ensure that you recover payment promptly.

Unfortunately, there is no recipe for guaranteeing payment but here are some tips which might improve your chances of being paid within a reasonable time period.

1. Know your customer. Doing a small amount of research on a prospective customer can pay dividends. There is a lot of information available online at Companies House if you are working for a company. Indicators of potential problems can be late filing of accounts or petitions to strike off the company on the Companies’ register. Credit checks can now be obtained cheaply and quickly with the credit agencies that score companies on their payment records.

2. Don’t be afraid to say no. We all want work and turning away a prospective customer can feel like going against the grain. In reality, we all want customers who will pay. If your research or industry gossip tells you they are bad news consider very carefully whether to accept their business. If you do, can you ask for payment up front?

3. Terms and conditions. You should have terms of business which set out how you are going to perform your contract, when you expect to get paid and allow you to charge interest on late payments of invoices. They can help you to maximise the most out of each contract. Check if yours should be updated today.

4. Agree the scope of work. It is always better to be very clear with your customer about what you are going to do so they know what to expect. If you are not going to meet their expectations, be honest and tell them so. Explain why their turnaround time cannot be achieved. They may be able to alter their expectations. Grumbles over the work you do can cause problems when you look to be paid and can give your customers unnecessary scope for complaints.

5. Payment terms. Many industries operate on credit terms. Be realistic about the terms you can offer within your industry but be clear with your customer that the terms cannot be exceeded. Monitor credit accounts to make sure you know who is exceeding credit terms and by how much. If the same customer is asking you to do further work consider whether you can ask them to clear their account before you begin on their next project or order. A gentle prompter each month by sending out statements of account help but you may need to be firmer with the persistent late payers. You may want to consider more creative ways of getting paid on time. Agreeing fixed monthly payments might help both businesses cash flow where you are receiving regular orders from customers. Offering a small discount for early settlement can also be a great incentive for prompt payment.

For further information please click on the work types or contact Susan Lewis for a no- obligation discussion of how Jordans’ Litigation Team can assist you today.

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