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Know your customer and make sure they are able to pay their bills by getting a credit check on them. This might seem like looking a gift horse in the mouth but a debtor becoming insolvent owing you two to three months’ work will create a big hole in your finances for something which costs 20 euros or so.

Agree payment terms before you supply. If they intend taking 60 or 90 days to pay you should find out before starting the contract and make a positive decision to take the work or not and figure out how you will manage until the debt is paid.

Invoice accurately clearly and promptly. Make sure you know to whom and where to send invoices and what detail they must contain. Raise invoices as soon as the work is completed and don’t wait until the end of the month.

Don’t be afraid to ask for payment. Telephone shortly after you send your invoice and progress the invoice through the customer’s invoice payment system noting who you speak to and what is said in conversations.

Be prepared to escalate complaints if payment is not received both in terms of who makes the contact in your business and the level of management within the customer’s management you talk to.

Discounts for prompt payment can be worthwhile depending on your need for the payment. The danger is payments slip and they still take the discount, meaning that it is effectively a price reduction.

Factoring and invoice discounting can help finance increasing sales. Customers must be creditworthy and you must be prepared for the additional checks and procedures which come with this sort of finance. On the plus side you are likely to get more finance than from a conventional bank loan or overdraft and you will be able to accommodate customer requests for extended payment terms. Recent developments in internet finance mean factoring or invoice discounting via the internet can be more flexible and cheaper than conventional arrangements.

Many customers prefer or demand invoices electronically. Consider how you will e-invoice before agreeing a contract. The key is choosing a system which is compatible with your customer’s system.