If you run your own business, you surely know (and if you don’t, your accountant will soon tell you) that cash-flow is king. There’s no point having thousands of pounds/euros/dollars in the payment pipeline if your bank account’s empty and you can’t pay your suppliers (or, ultimately, the mortgage).
I work a lot with Italian public sector clients so I know what I’m talking about.*
One of the problems is that you feel powerless. You’ve kept your side of the bargain: you’ve done the work, you’ve submitted your invoice and now your clients are placing you in an untenable position that’s putting your business and reputation at risk. And there’s nothing you can do about it.
Well, maybe there is something you can do. My system is to send out a reminder to clients that an invoice will soon be due for payment, about 5-7 days before the due date. I word it nicely, the degree of formality depending on how well I know the client. If, one week after the due date, they still haven’t paid, I send out a further politely worded reminder, specifying the date by which I’d like the payment to be made.
When the client does pay, I follow up with a brief “thank you” message.
One of my clients used to say that she never paid an invoice until her suppliers reminded her to. And just last week I discovered that an invoice I’d sent to another client in early April hadn’t been recorded at their end, and was only discovered when they received my reminder. They’ve now introduced a new procedure to ensure that my invoices go directly to the right person in accounts.
So it pays to jog your clients’ memory.
Just sitting around complaining about late-paying clients won’t solve any problems. And sending out reminders won’t necessarily speed things up, if your client is determined to hold out until the last possible minute (they’re under cash-flow pressures too). But if you take some initiative, you’ll feel less powerless and more in control. If your client still doesn’t pay on time, at least you’ll know that you’ve acted in a business-like way.
*But a huge thanks to Stefano, who got my 2 May invoice processed and into my bank account in just 18 days!!!
By Marian Dougan