Posted - 09/01/11 | 0 Comments

Toning up your collections – Part 1: How the big guys try and bully the small guys

It’s 2011 already. A new year means new years resolutions and we thought we would make one that we could share with all of you. Our resolution is let’s all tone up. No not our waist line but our processes and discipline for collecting what people owe us on time. The theory is simple: you delivered that service or product on time, it does what you said it would do and your customer agreed in the T&Cs to pay you in 30 days. So 30 days later the money is in your bank right? Wrong! According to Experian, UK business as a whole pays its bill just over 23 days late!!

Whilst Clear provides you with some great tools for organising and managing prompt collections, there are lots of other techniques you can employ to ensure you are not put in a position to be chasing late payment.

In the first blog of this series we are going to use a recent case study to illustrate why sending bills out and waiting for return payment is not a strategy.

According to The Daily Telegraph, Invensys Rail has told key UK contractors they will have to wait up to twice as long to be paid. 

Apparently, it’s a case of bringing payment terms ‘˜in line’ with company terms … which means payments two months after the month in which the invoice was raised, according to the report.  

Of course, this shunts cash flow pressures down the line to the smaller companies that are coupled to the business. 

And they’re feeling it. The Telegraph quotes one supplier saying: “Invensys was already one of the worst payers on 55 days and now it’s another 30 days.” 

So the first subject we are going to tackle in the next article in this series how to get through to the big guys who won’t pay on time.

In the meantime, take solace from the fact that there are not many like Invensys out there and fortunately, this doesn’t happen so easily with Clear. Every Clear invoice gets there two days faster than a posted invoice and is automatically stamped with your preferred payment terms. And if there are delays, then Clear can chase up payments automatically on your behalf. Usually that is enough.

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