BCMA Member Exclusive: Getting Paid On Time

BCMA Member Exclusive: Getting Paid On Time

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The author Mark Twain once remarked “I am more interested in the return OF my money, than the return ON my money”.

At Direct Route AccountAssyst we enable you to apply this incisive viewpoint.

Let’s Reflect

Throughout 2019 many highly regarded brands became Insolvent, with a constant stream of lesser-known businesses joining them monthly. The ‘debt ripple effect’ on smaller businesses is significant and being painfully felt.

2019 brought over 16,000 UK company insolvencies.

How can you avoid becoming a cashflow victim of the thousands of 2020 insolvencies that will inevitably occur?

Some Facts

Research from Hitachi Capital Business Finance highlights late payments badly affecting business:-

  • 75% of small businesses or SME’s (10-49 employees) deal with late payment problems daily.
  • 50% of sole traders regularly manage debtor issues.
  • A study by Statista Research Department estimated over 20 Billion pounds in 2019 was spent on UK advertising. When we consider that around 99% of ALL businesses in the UK are SME’s, this suggests a lot of advertising agencies being owed major sums.

Take Action

There is no excuse for failing to implement the most robust credit management practices available. If you don’t, then you can potentially be exposing your business to avoidable losses.

Inability to recover outstanding monies damages a business, sometimes fatally.

Poor cashflow stifles investment, opportunity, delays growth and reduces expenditure on essentials such as marketing. Wasted staffing costs in chasing overdue customers worsens matters.

Of the two well-known sayings ‘Turnover is vanity, profit is sanity’ and ‘Cash in the bank is reality’ which is the most important?

Direct Route has several proven solutions. Our credit management pedigree in helping clients for over twenty years (as the 2002 UK pioneers of ‘Zero Cost Debt Recovery’) suggests that we know a thing or two about non-paying customer invoices and debt avoidance.

Our three top tips to minimising your exposure:

  1. Always know who you’re dealing with.

A new prospect/customer referred from a trusted business contact? A positive industry reputation with strong financial records? It is always your decision whether to extend credit. Having the correct tools available at your disposal to make that decision is vital.

Start out with a concise and accurate credit account opening form.

We recommend that any party extending credit regularly reviews customer exposure, carries out credit checks and monitors existing customers.

Your exclusive BCMA Credit Management Package provides key information, so there is little excuse for not using it.

  1. Invoice promptly and correctly.

One vital part of the customer journey is correctly submitting invoices. You can’t be paid on time if your customer hasn’t been sent an invoice.

Ensure you invoice on the same day that you have completed service / delivered goods. Prompt invoicing is common sense, but it’s surprising just how uncommon common sense can be! Consider your business now, truthfully – is your invoicing as slick as it could be?

Make sure that your invoice contains everything a customer requires to make payment. The amount, payment terms and your bank details are minimum, but additionally thing like customer order numbers may ensure speedier payment.

  1. Request overdue monies immediately!

There can be anxiety from suppliers when it comes to requesting payment…this is especially challenging in smaller supplier businesses where personal relationships matter. It’s  tricky asking the same person for payment that you also want that next key order from.

If, however your overdue invoice is correct then don’t worry, you’re fully entitled to payment on the  due date, so request payment promptly from anybody, large or small, that hasn’t paid on time.

Keep on top of invoicing and payment allocations – it is unprofessional to be chasing a customer that has already paid.

Have a rigid chase process. Be firm but diplomatic and immediately address queries in response to payment requests. Organisation removes anxiety, culminating in prompt payments.

If You’re Not Currently Doing the Above

Don’t worry. Help is at hand for every BCMA Member. Simply call 01274 223190 to activate your exclusive BCMA Credit Management Package benefit. After a brief conversation we can have systems up and running for you within minutes. All advice/guidance is free of charge.

Alternatively visit www.directroute.co.uk or https://bcma.accountassyst.com for more information.