Slow paying clients can be considered a major problem for companies; consuming time, resources and jeopardizing the financial stability of several small and medium sized businesses. Slow paying clients can be a major problem for companies; consuming time, resources and jeopardizing the financial stability of several small and medium sized businesses.
Like it or not, the existing recession and sluggish recovery have forced many businesses to live from invoice to invoice. A past due payment can have a poor effect, forcing the business to delay payroll or critical provider payments. The ultimate way to handle a slow paying client is to avoid the problem from happening in the first place. It’s a lot more effective to invest your resources ensuring clients pay promptly, rather than going after slow payers. This is accomplished fairly easily. There are a couple of things you must do to make sure commercial clients pay one time.
First, you need to check on their commercial credit rating / payment history – and only give credit terms to those that have an acceptable credit report. This can be done by using one of the many business credit reporting agencies that exist. Most reports are inexpensive relatively. Second, you need to have a good invoicing and follow-up procedure in place.
This will need some work but will have a substantial payoff. Be sure to send invoices to clients in a timely fashion and be certain to verify that they received the invoice. If your clients won’t pay their invoices quicker, your second option is to fund your invoices using invoice factoring.
- Have a reliable job or way to obtain income
- Business Analyst creates Business Requirement Document (BRD)
- Minimum stay at the destination 7 times
- Stand out from your competition
The factoring funding advance may be used to cover your business expenditures, while you await your clients to pay. The deal with the factoring company is settled once your client will pay the invoice in full. Factoring has two advantages. First, it can improve your finances, especially when coupled with a good invoice management program.
Second, and perhaps more importantly, you receive because of it control of your money movement, getting rid of the guesswork of when clients shall pay. This enables business owners to spend additional time running their business and less time chasing invoices. Qualifying for factoring is simple relatively. You need to have clients with a good commercial credit history and good invoicing practices. Additionally, your business has to be free from encumbrances.