We hear a lot about slow payments and most of us experience the pain of slow payments, but for one client of ours it caused the death of the company.
Our client ran a very successful management consultancy specialising in the retail sector and landed an excellent assignment with one of the major retail chains.
Excellent – until it came to getting paid. It turned out that the retailer was happy to pay our client’s invoices somewhere between 90 and 120 days after presentation.
And although there was never any risk of default – the money would always come eventually and the retailer was never going to go bust – the frustration of not being paid led our client to throw in the towel. Offered a job in a related sector the business owner shut up shop and went back to full-time employment.
Which means this company will not grow, will not hire people, will not help more businesses and the greatest shame is that our client really enjoyed most aspects of running their own business, being their own boss and seeing how far they could take it.
How to speed up slow payment?
Slow payment is a curse of business life and my advice is to ensure you put credit control front and centre in your business and never let it go:
- introduce a direct debit tool, such as GoCardless, and turn away prospects that won’t sign up to DD
- put email systems in place to ensure invoices and statements go out on time to the right contacts at your customers
- be on the phone to your slow paying customers and do not let them off the hook until they have paid
- be prepared to sue and / or walk away from customers who are serial slow payers
Slow payment is a pain, but it doesn’t have to be fatal.
Call Michael Austin on 020 7125 0270 or email info@bluedotconsulting.co.uk and let’s have a free-of-charge chat about your business.
Michael – @bluedotmichael
Related links:
Get paid quicker – 5 tips to improve your sales invoices
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