How to make sure you get paid on time every time

In my business we have a rule. The rule goes something along the lines of: We do the work we get paid for doing the work. That’s it – no exceptions, no arguments. If on the rare occasion, someone isn’t happy with the work we do, we’ll look at this and go out of our way to sort it out, but this isn’t (in my book) an excuse not to pay.

This policy has worked really well for me – we’ve only had one problem payer in the last 5 ½ years. All of our clients are up to date on payments and it’s very rare now that we have a late payer.

So, I thought in this article I’d share with you some of the things that we do and hopefully it will help you as well. Here are my top ten tips:

1. Send your invoices out on time.
I was having a chat with a client the other day who said he’d ordered some business cards about 18 months ago and he’d only just received the invoice for them. Good grief! Rule number one in my book is to send your invoices out on time. My invoices always go out on the 1st week of every month no matter how busy we are and then clients have 14 days to pay them. Come on guys, make sure you have it in your diary to send these invoices out as soon as you’ve completed the work.

2. Make your payment terms very clear
Our rule that I told you about at the beginning of this article is made very clear to all of our clients before we start working with them. They all know that we hate bad payers and that we will refuse to work with them if they are. Making sure everyone knows when they will be sent an invoice, when they are expected to pay it and what happens if they don’t is the key to making sure you get paid on time, everytime. If people are not clear on what’s expected of them, are you surprised that they don’t do what you want them to do?

3. Ask for deposits
A good policy to get into the habit of doing is to ask for a deposit upfront before any work has even started. It’s quite usual these days to request this and can prevent a lot of problems later down the line. At least then, if they don’t pay any further money, you’ve been paid for the work you’ve already done. Deposits of anything up to 50% are fine – try it and see if it works for your business.

4. Set up Standing Orders
Another great way to make sure that you get paid when you’re supposed to is to set up a Standing Order. Psychologically in the customer’s mind, they’ll have already committed to paying you every month then and it’s highly likely then that you will actually get paid. To create a standing order, simply ask for a form from your bank and then type it up on your PC so that you can email it or send it out to your customers.

5. Lead by example
There’s no point hassling other people to pay your invoices unless you lead by example and pay yours. This means that you give out a strong message that you pay your bills on time and that you expect people to do the same for you.

6. Have a policy in place if people don’t pay
It is well worth having a process in place that you can follow if people don’t pay you i.e. that you’ll call them, then send them a letter, then send them a sterner letter and then finally threaten and take them to the small claims court. Having this set down in your terms and conditions make your clients aware of the penalties of not paying.

7. Chase, chase and chase again
If someone owes you money, all the rules about hassling people go out of the window. Chase, chase and keep chasing – every single day if necessary until you get the result you want. I once worked with a client who owed lots of money to different people. He told me that he paid those people who shouted the loudest and ignored those who were quiet. So hassle away.

8. Use text messaging
This is by far one of the most effective techniques we have to get money out of people. Phone calls can be left to go onto answering machines; emails and letters can be ignored, but for some reason everyone looks at their texts. If you’re finding it hard to get in contact with some, try texting them and see what happens.

9. Use someone else
If you don’t feel comfortable chasing people for money, get someone else (like a book-keeper or credit controller) to do it for you. And if you’re really stuck, get a friend or a partner to do it for you. With difficult payers, often just hearing someone else’s voice can do the trick. Also, if they’re not answering your phone call because they know the number, try calling from someone else’s mobile.

10. Come down on them hard
If you’re dealing with problem payers, make sure you follow through on your policy for non-payers and come down on them like a ton of bricks. Not paying you is never acceptable, so don’t put up with it.

While it’s hard dealing with someone who owes you money, being very clear about what your expectations are is the first step and then making sure you follow through on your actions if they don’t pay. Try it today and don’t put up with bad payers.

Exceptional Thinking (http://www.exceptionalthinking.co.uk/) provides help and advice to small business owners and start-ups on marketing, market research and business planning.