Late-paying customers are one of the biggest causes of cash flow problems for SMEs.<\/p>\n
It can be a tense situation as you want to make sure you consistently get paid on time without damaging a repeat-business relationship with one of your clients.<\/p>\n
By having procedures in place, there are ways to make sure you don\u2019t act as a free lender to clients whilst avoiding confrontation.<\/p>\n
Reach out early<\/strong><\/p>\n While having a challenging conversation with a client is no one\u2019s idea of fun, they\u2019re always necessary if payment is late.<\/p>\n When approaching a deadline, routine reminders should be sent to the client in a fixed cadence, such as two emails before the due date and one on the day.<\/p>\n The more systematic the reminders are, the less clients feel as if they are being personally nagged by your business.<\/p>\n If a payment becomes overdue, it is important not to procrastinate and to reach out as early as possible to keep your options open.<\/p>\n This could involve setting out flexible payment options, such as Direct Debits, to begin closing the payment gap and improving your cash flow.<\/p>\n Early correspondence with the client should be kept warm and over the phone where possible, to better your chances of queries being resolved on the spot.<\/p>\n Email nudges should include copies of the invoice to clearly state that payment is overdue and to get in contact if the company is in financial difficulty.<\/p>\n Good faith should be assumed at early stages because genuine oversights can happen and an invoice might be lost or stuck in approval.<\/p>\n