Make sure you’re paid on time and in terms.
While the economy is so uncertain and financial needs are impossible to predict, many agencies find themselves having to deal with clients who will try every trick in the book to keep their money in their bank accounts for as long as possible. Some will go so far as to toe the line of acceptability in their attempts to delay payment.
These 8 steps will help you ensure your payment terms are met consistently and on time, every time.
- Find out payment information directly from accounts departments – if you find out the client’s payment processes and procedures before raising an invoice, you can be sure of raising the invoice correctly first time through and avoid getting stuck in the red-tape of having to redo it to the client’s specifications.
- Enable delivery reports and read receipts on invoice emails – when sending invoices by email, it’s important to track the status of the email, to prevent problematic excuses that emails have not been received.
- Ask for confirmation of receipt – request that the client confirm that received invoices are correct and have been factored into their next payment run. This will ensure that you don’t hit the payment date before finding out there was a problem with the invoice
- A week before the payment is due, call the accounts department – this will allow you to confirm that the invoice is in the next payment run, and you may receive a remittance of payment if you have already had the invoice confirmed.
- If you can’t get through directly to accounts, go through the main switchboard – it can often be difficult to reach specific departments so go through the main company switchboard to get to the accounts department. If you’re transferred to a voicemail or an automated line, call the switchboard back and ask to speak with someone else in accounts, until you get through to a person.
- Keep the pressure on the accounts team – it’s much more difficult to delay paying someone who is really putting the pressure on, and if you’re not firm and consistent with chasing payments, they will become more relaxed about making payments.
- Don’t rely on substandard credit control – many invoice finance companies will claim to chase credits for you, but will often not verify an invoice until it is already overdue. Ask them about their ‘Dunning Cycle’, and you may be surprised to find out how lax it is.
- Don’t be afraid to send a warning notice – if a client fails to make a payment within your specified time frame, or is being unresponsive, send a seven-day-warning notice explaining that they have seven days to make the overdue payment before you begin to seek legal action. Don’t worry about damaging client relationships, as the client will be fully aware that they are in breach of the agreed contract. If they are not aware, the warning letter serves that purpose, which is why it’s best not to seek legal action immediately.