If your business has a late payment problem, you’re not alone. In fact, BACs report that around 50% of SMEs are experiencing late payments.  The good news in that statistic is that there are 50% of SMEs who aren’t struggling to get paid on time.  So what are they doing differently? And are there any particular tactics that could help you as an event organiser or publisher?

Here, Chris Gibbons of outsourced credit control firm Query Management, who works  with publishing and events businesses gives her top tips for being one of the 50% of SMEs that DO get paid on time.

• #1: Have a system.  Run reports from your accounting software so you know what is due and when. Then act on the information.
• #2: Issue invoices promptly.  Obvious, but not always done. The sooner the customer gets the invoice, the sooner you get paid.
• #3: Clarify stage payments. Where you have a staged payment system, perhaps for an exhibition, make it clear that each invoice is only a partial invoice.  State the date on which you will issue the next invoice, so that the customer can put it into their finance system as a payment due. It’s all too easy for invoices to be ‘forgotten’ because the event is in the future, or for accounts payable to think an invoice has already been paid because it looks just like a previous one.
• #4: Always check whether a PO number is required. Many large organisations now won’t pay an invoice without one.  But neither are they likely to call you and ask – the invoice will simply sit on a desk, not entered into the system and not paid.
• #5: State both the payment terms and the due date clearly on the invoice. This makes it easier for anyone entering the data into an accounting system – and gives the customer no excuse for missing the information.
• #6. Include bank account details so payment can be made direct. Put the information in large print on the invoice itself, and, if you are emailing the invoice to a new customer, give the bank details in the email as well.  This tackles the problem of a finance administrator assuming that because you are a new supplier they won’t have your bank details on the system and putting the invoice to one side until they have time to sort it out.
• #7. Check every invoice is accurate.  Few customers will rush to query an invoice that doesn’t look right – they just won’t pay it.
• #8. Call the customer a few days before the invoice is due to check that payment is in the system and will be processed. I’ve never come across anyone who has objected to a polite phone call. If you get the ‘we didn’t receive the invoice’ response, you can send a copy over by email straightaway, giving the customer no excuse not to pay.
• #9. Agree non-standard terms. If, as is common in publishing, you have non-standard terms, make sure you agree these with the customer on taking the booking – don’t hide them in small print.  It’s also worth speaking to the accounts payable team shortly after you have sent the invoice, to make sure all is in order – i.e., that they have spotted the terms and are processing the payment accordingly.
• #10. Check your admin. Keep an eye on the wider administrative processes, and make sure each step is completed as it should be. It’s common for customers to delay paying because artwork hasn’t been approved or a copy of the publication hasn’t been sent.  

If you don’t know when or if payments are coming in, you can’t plan and can put your own business at risk. A proactive approach, sensitively done, helps you keep your cash flow healthy and your business in business.

Chris Gibbons

chris@querymanagement.co.uk

http://www.querymanagement.co.uk/

Query Management provides outsourced credit control to SMEs, and has particular experience in helping specialist publishers and event organisers. 

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