It doesn’t matter if you’re your own boss working from home, or if you’re running your own company – at some point, you’re going to come across a customer or company who simply won’t pay their bill or bills to you. These could be companies that will pay you eventually or companies that have no intention of paying at all. One of these situations is worse, but both are still pretty bad.
Always try to agree on payment terms with your customers or clients. Setting up a system like this will hopefully aid your customers in paying you on time rather than not paying at all. People are strange things and are always unpredictable – a balance payment plan can remove this unpredictable nature from the business transaction and regularly get money flowing into your business coffers.
Recurring bad payment history is a huge red flag. This is where you need to install a payment plan before the company that fails to pay suffers some serious problems and falls apart before they can pay their debts to you.
Payment terms are great for legal matters as well. Your customer will know when payments fall overdue. If the payment still hasn’t been paid to you and you have waited for a while, you may choose to add interest. Interest rates vary, so seek advice on this before you start adding numbers to bills. Once the interest has been calculated, send your customer a new invoice to reflect this new amount that is now owed.
Once the debt is passing into a lengthy time, you might also consider adding debt recovery charges. It is going to cost you money to chase your debt – telephoning around and posting letters costs money, and it is yours to claim back. Of course, this is another aspect to seek advice on before charging ahead.
Getting money back can be a hassle, but it is so important to remove emotion from the occasion. Stay calm and know your limits – always be polite no matter what. It’s hard work to get money back from companies in your debt, and factoring is a great solution to it all. Factoring is the method of selling your accounts received of customers debited to you or the unpaid invoices stacking up. You would sell these on at a discount to receive instant payment meaning you can get on with running your business and someone else can now chase up the debt. There are plenty of ways you can do this and listing your accounts on a site like Factoring Directory is a good start. People in haulage do this as you can’t chase debts while driving A to B, so it’s a good way to keep the business running, you can find out more on their site which you can visit online at FactoringDirectory.org/industry/freight-trucking/.
Be smart about your money and try to be proactive and stop bad payment habits before they begin. It might seem out of your hands, but it isn’t.