Getting clients to pay ontime

Surely one of THE most frustrating parts of running a business – especially when people owe you for services you have put your all into and you have delivered.

So, what do you do? Surely you don’t want to upset them (😢) – after all they are a a client, aren’t they?

No, they’re not!

A business relationship is a two-way relationship, so why should you let them treat you badly?

1) A client respects their suppliers, pays on time and generally is grateful for the services provided.
2) A client doesn’t quibble over the quoted cost, they don’t delay payment and they don’t treat you like something that has fallen out of a dogs bottom on the pavement!

Now, don’t get me wrong here, there are times when clients ask for extended terms for legitimate reasons. As long as they communicate this with you and YOU AGREE to extend the terms, then that is fine.

🔴 It’s when they “ghost” you.
🔴 They refuse to pick up the phone to you, or respond to your emails etc.
That is when you have to question whether you even want them as a client if this is how they treat their suppliers.

What can you do?

Use a Letter before action for debt recovery

✅ Quite simply, if you can’t get hold of them and the invoice is overdue send them a Letter Before Action (LBA). This is a letter that clearly states a deadline for payment, if the payment isn’t made by that date then you can legitimately charge interest on the debt and costs against the recovery of said debt.

And doing this isn’t as expensive as it may sound…..

If you’re a member of the FSB (https://www.fsb.org.uk/knowledge.html) you can download a template LBA (there are actually over 1500 different templates you can download!) and send it to the client, if you pay £30 you can get their lawyers to send the letter on your behalf. It has a bit more ‘punch’ coming from a solicitor than on your own headed paper.

It may seem a bit heavy handed, but trust me when I say this – it isn’t because IT’S YOUR MONEY!

Typically when we are doing the sessions (https://peer-power.co.uk/the-programme/) on cash flow forecasting we end up discussing how to handle your debt recovery and how implement a credit control process that reduces your debtor days and the need for debt recovery.

#debtrecovery

#creditcontrol