Experts Reveal How To Reduce The Risk Of Unpaid Invoices
With unpaid invoices an issue that affects the majority of business, small and large, around the UK, the team behind the UK’s largest invoice finance broker have revealed its five top tips to avoid late or non-payment from clients.
With many accounts departments in large and small business around the UK battling with late or unpaid invoices daily, the UK’s largest invoice finance broker has revealed its five top tips to avoid such occurrences as clients dodging payment or being slow to pay their bill.
Touch Financial (www.touchfinancial.co.uk) decided to divulge these top tips, following an increasing number of queries from customers about how to avoid late or unpaid invoices altogether. According to the Touch Financial team, the top ways to reduce the risk of unpaid invoices are as follows:
- Firstly, it is important to assess the credit history of the customer or client before even considering working with them. This will give more of an idea about whether the client in question would be likely to pay invoices late or not at all. There are many apps and sites that help with this.
- Take trade references – as well as checking credit history, contact other companies that your client has had dealings with and ask for a reference. It’s always worth doing this kind of background check if possible. However, be aware that they are unlikely to put you in contact with anyone experiencing problems! The benefit of trade references can therefore be limited but can serve to give you additional comfort with the legitimacy of a new customer.
- Good credit control is essential – some businesses can have a tendency to be too ‘commercial’ about advancing more credit to customers who are slow to pay. It’s important to resist the temptation of doing this, as being too lenient can end in disaster with customers taking advantage of your goodwill by paying late or not at all.
- Check contracts and your own Terms and Conditions – Make sure upfront that you have specified your payment terms. Give very clear deadlines and make sure you bring this to the attention of the customer before you trade. This will set expectations early on.
- Consider credit protection – If the client or customer’s business fails, credit protection will ensure you still get the money you are owed. The limits available are generally better than a year ago, as some degree of confidence has returned to the credit insurance marketplace.
- Outsource credit control and Factoring – Factoring your debts will give you funding, credit control, collections and, if you choose, credit protection in the event your customer ceases to trade. It’s always worth considering your options as the peripheral products offered by factoring providers often not only give you more structure to your customer collections management, but can also provide a significant benefit over traditional bank overdraft lending.
Simon Carter, Director at Touch Financial, said the following about the advice for reducing the risk of unpaid invoices:
“Whilst some of these tips may seem like an obvious way to reduce or eliminate the risk of late and unpaid invoices, you’d be surprised at the number of businesses all around the UK that don’t take the necessary steps to ensure this doesn’t happen.
Late invoice payments can really hinder certain aspects within company, from cashflow to payroll, so taking every step possible to ensure it doesn’t become a problem is important.
For more information please contact Emma Kent of 10 Yetis Public Relations Agency on 01452 348211 or email@example.com.
|posted on 09/08/2012 Tagged with PR Public Relations UK PR Agency finance invoices late invoices invoice payment late invoice payment invoice finance broker Touch Financial touchfinancial.co.uk|