Small businesses often have less of a buffer than their larger counterparts. Therefore, during times of economic uncertainty it is more essential than ever to keep a close eye on the finances of your business.
With good credit control you will always know how much money is due to you and how much money you owe. You need ensure that you keep money rolling in to improve your cashflow and your financial solvency.
Here are 7 success and survival tips for small businesses to help ensure you get paid on time:
1. Invoice on time
This may sound pretty basic but some sole traders and even larger companies are tardy when it comes to submitting their invoices. Sometimes, as strange as though it may seem, sole traders are reluctant to charge for their products or services because of self-esteem issues. You have bills to pay just like everyone else and if you are confident of the quality of your products and or services then it is your duty to charge for them and to do so promptly.
2. State Terms and Conditions Clearly
Ensure that there is no ambiguity regarding the terms and conditions of payment. Clearly state these on your invoice and any subsequent statements.
3. Issue Statements for Unpaid Invoices
Have in place a system for monitoring outstanding invoices and issue a reminder statement as soon as a payment becomes overdue.
4. Verbally Ask for Payment
Use the phone and ask for payment. If you're uncomfortable about doing this is may be cost-effective to hire someone to do this on your behalf. Follow-up telephone calls with a letter or email so that you have a written record of what was agreed.
5. Keep Accurate Records
Keep a record of all your communications, i.e. letters or emails sent and telephone conversations.
6. Suspend Further Supplies
Until the account has been brought up-to-date suspend further supplies. However, obviously there may be occasions where you do not feel that this is appropriate.
7. Take Legal Action
Of course this is a last resort situation. If, despite all your entreaties, payment is not forthcoming then issue a final letter stating that you will be placing the matter in the hands of a solicitor. In this instance, once you have declared this intention you must follow through.
Hence, it is a good idea to know where you can seek legal advice for your business or hire a solicitor should the need arise well before needing to do so.
Of course, this line of action will have several repercussions not least of which will be additional costs to you so consider this line of attack carefully before taking action.
Author Resource:-
Bonus Tip: Offer an incentive for early payment. For more expert advice on starting and running a business from a self-made billionaire visit the Billionaire Business System. Discover how you can strengthen your business even during times of uncertainty.
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