13 Mar A controversial question for you and your business…
A seemingly simple question that I ask my clients often leads to some surprising, and controversial answers.
What are your payment terms?
I’d love to know your answer to that.
Is it straightforward or does it bring up some uncomfortable feelings for you?
I hear from lots of business owners who get uncomfortable around this.
Delivering work, then thinking they have to wait to invoice on completing, then set payment terms of 30, or even 60 days.
Then they wait, and wait, and wait.
Checking their business account to see if they’ve been paid yet.
Getting frustrated when they’ve not been paid.
Feeling icky at having to chase up the invoice – when is the ‘right’ time to chase it up?
No wonder it can bring up uncomfortable feelings. How blinking annoying to do great work and then have to wait, and even chase up payment!
Outstanding invoices won’t pay your food bill at the checkout in Tesco!
Digging into this, there are reasons why some business owners end up in this situation:
- They’ve done some research and think there’s such a thing as an ‘industry standard’ of 30 or 60 days payment terms
- They don’t want to appear small, and think that setting shorter payment terms indicates they have cashflow problems
- They are worried they will apear too demanding and lose the customer
The truth is there is no ‘industry standard’, you will have cashflow problems with longer payment terms, and who wants customers who delay paying you?
Here are some ways you can move away from this and towards ‘best practice’:
- Get full payment in advance of work. If this is a step too far right now, get part-payment upfront, or reduce your payment terms to no more than 14 days.
- Define how you want your payment process to work, including when an outstanding invoice will be followed up.
- Use accounting software such as Freeagent or Xero to automate the process and send follow up reminders.
- Make it easy for your customers to pay you by utilising tools like GoCardless (great for recurring payments) and Stripe (great for one-off payments).
Have you learnt any more great tips to get paid quickly in your business? I’d love to know so please hit reply to this email to share them with me.
Curious to know how I can help you in achieving your business goals?
Book in a complimentary business coaching strategy session to find out more, and identify some quick wins tailored to your business.
Alison Bradford
Latest posts by Alison Bradford (see all)
- Does your work diary reflect your business goals? - April 14, 2024
- Could your business use a ‘Reset & Recharge’? - March 30, 2024
- A controversial question for you and your business… - March 13, 2024
Sorry, the comment form is closed at this time.