Payment due

Continuing on from our previous article about Getting paid on time – what can you do if payment is delayed and you are getting concerned that there could be a problem with payment of your outstanding invoice and possible the business.

Most businesses fail because of Bad Debt and poor Credit Control, on average Irish SME’s are now waiting 59 days for payment so let’s be proactive with all of your debtors – start your dialogue with them sooner rather than later, calling them a week before the payment is due to ensure there are no reasons not to pay on time. Smoke out the possible bad ones before they even happen. Use your intuition, you are experienced enough to know when things are not right. Let’s face it, the majority of their other suppliers won’t start calling them until probably 60 – 90 days after payment is due so you will be one step ahead of them. Resolve all disputes quickly and efficiently and ensure that the customer is aware of when the payment is due. Send Month End Statements and payment reminders. Be firm with them but not aggressive as it will get you nowhere, if need be giving ultimatums and set specific deadline but always stay on top of them until the problem is resolved.

If a customer is overdue on payment, initiate a staged process of communication including e-mails, phone calls and mail (preferably Registered). Document everything in case it goes legal. Speak with your sales people who are responsible for the account, include them in all communications and in the collection process. Hopefully if they have developed a good rapport with the customer they can get to the core of the problem quicker and resolve it.

If there is payment delay call the customer within a week of the due date, speak with them directly and get a commitment on exactly when they will pay and how much. If they fail to pay within 90 days or whatever your Terms of Business state after the due date, enlist the help of a legal expert or a collection agency. You’re better off leaving the job to professionals than delaying bringing them in and wasting your own time trying to recover payment.

Make It Easy for the Customer to Pay

Why not get trained in Cash Collection methods and Credit Management techniques – there are some excellent courses available including part time certificate and diploma courses. Implementing a cash collection strategy means creating a win-win situation for yourself as well as for your customers.

Check out these tips, the objective is to make it as easy as possible for your customer to pay you:

  • Invoice your product or services as soon as you complete the work or deliver, remember the longer you delay the more chance the customer will find fault.
  • Learn about your customer’s payment cycle – the larger the company the greater the chance they only pay on a particular day in the month – miss the Check Run and you have to wait another 30 days.
  • Consider revamping your billing cycle – instead of the usual end of month, send out invoices twice a month or even weekly. It will ultimately help your cash flow.
  • Offer a range of payment options including credit card, debit card, PayPal and of course by electronic bank transfer, cutting out the old excuse of ‘the cheque is in the post’.
  • Implement part payment options for long-term services or services that require your company to spend on materials. For long-term services, you can also set up a direct debit system saving both of you time and money on admin tasks. Give customers options as one payment system may not suit everyone.
  • Make it mandatory for customers to pay a minimum value by the payment due date.
  • Offer discounts for immediate payment or for payments made well before the due date. Remember cash in your bank is better than no cash at all.

Collection your cash in a timely and professional manner is key to managing and growing your business. Communicate with your customers, develop relationships with their finance team as you need them as much as they need you, both of you are managing the flow of cash in and out of your businesses so why not work together and set up systems that suit both of you. Anticipate problems and work with them to develop effective solutions.

If all else fails you will have to employ the services of a professional Debt Collection agency, it will cost you money but it is better to get paid even if it means giving away some if not all of your hard earned profit rather than have a bad debt hurting your business in the long term. What can you do in the meantime while waiting for a resolution, why not consider on using Invoice Discounting as an option to release the cash early from other customer invoices allowing you time to work through the outstanding debt issue.


Celtic Invoice Discounting will advise you on whether Invoice Discounting will be right for your business or not. We will speak to you in plain English and give you all the facts you need to make a decision. Why not call us on 01 230 0866 for a confidential conversation.