7 SIMPLE STEPS TO GETTING PAID MORE QUICKLY

It has often been said that managing cash is the first rule of business, or perhaps more commonly  - "Cash is King". Here are 7 simple and sure fire ways to improve your chance of getting paid on time.  Hopefully there is nothing new here and you'll be reassured that you've got all your bases covered, but it might serve as a reminder for 1 or 2 points that could do with improving.

1. Carry out credit checks on your customers.  Be clear about who you are actually trading with - some people are deliberately vague about this.

2. Ensure that the agreed contract is clear and unambiguous.  This makes disputing a future invoice much harder.

3. Ask for a deposit with order - the more the better.  This has 2 stunning benefits: it immediately improves cash flow, and it significantly reduces your risk should you get a bad debt as hopefully you will at least have your raw material costs paid.

4. Invoice as soon as the contract allows - waiting till the end of the month to invoice loses valuable time.

5. Make sure the invoice is correct - check the billing address, quantities and values, making a simple error can seriously delay payment

6. Chase in writing - send out a statement within 2 weeks, a polite letter requesting when due, a prompting when overdue, then a strong letter before taking further action.  When this process is automatic you can be 4 pieces of paper into a legal process when many people have just started chasing their invoices at 60 days after delivery.

7. Do a good job - don't give your customers unnecessary excuses for delaying or reducing payment

Date: Mar 21 2006 8:00AM
Category: BUSINESS EDITORIAL