Regardless of which industry you are in, there are steps you can take to reduce the incidence of non-payment, well before the account becomes overdue. 5 simple tips include:
1. Offer immediate payment options where possible (such as EFPOS, credit or debit card payments), to gain payment upfront.
For businesses without traditional store fronts there are a range of smartphone payment apps on the market that pair with a bluetooth/mobile card reader (such as ANZ FastPay), enabling you to collect payments on the go. Checking that the card is in name of the person whom you are supplying the goods/services to will reduce your risk of a payment dispute later on.
2. Know who your customer is.
Make sure you have the customer’s full name, address and/or company details including ABN. If it is a company, check that the details given to you match those on ABN Lookup and if they don’t match ask why. You may be dealing with a Trust whom has no liability for any incurred debts.
3. Make sure all the details on your quotes, invoices and follow up letters are 100% accurate.
Incorrect data can cause you headache and cost you money, for example sending out an invoice of $450.00 for a $4,500.00 account.
4. For new or slow paying clients, call 3-4 days before the account is due to ensure that everything is going well.
This gives you the opportunity to resolve any issues before the account becomes overdue, as well as being a good customer service initiative.
5. If you do business with large companies and/or the government make sure you send a copy of your invoice: a) with delivery, b) to whomever authorised payment, and c) accounts payable
If you found these tips helpful, and you would like further advice on creating credit terms and/or other risk management initiatives, please contact us at firstname.lastname@example.org or on +61 2 9539 8818
Disclaimer: The information displayed on this page is provided for information purposes only and does not constitute legal advice. If you have a legal problem, you should see a lawyer. Central Finance Management Group an affiliated companies aim to provide information that is accurate, however does not accept responsibility for any errors or omissions in the information provided on this page or incorporated into it by reference.