Forum For Private Business gives tips to get payments

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Business owners esspically in the construction industry are constantly over shadowed by some customers relctance to pay or pay on time this affects most SME’s and can offten cause business to fold.

The continuing bad culture of late payment remains a concern for many small businesses according to Forum of Private Business,  reporting that over  23% of its members questioned in a recent finance survey had seen an increase in late payment over the past year or so.

So they have complied a list of useful points for those in business to help them get paid on time.

The cash flow challenge for small businesses and highlights the key steps a business should take to ensure they get the money they are owed without court.

Source Forum of Private Business.

1.    Always use terms and conditions
You should always have clear payment terms and conditions and get these signed by your customers. This makes things clear from the start and also makes it far easier for you to chase debts if it reaches the stage of court action. Terms should be discussed at the earliest opportunity, especially when negotiating a large contract.

At the very least, your terms should include the following:

•    the length the credit will last
•    a clause asking for a signature to show acceptance of the terms; and
•    a clause outlining your right to charge interest for late payment.
Also be aware of any wording in documents from your customer that changes the agreed payment terms. If you accept their order, you might also be accepting their changed payment terms and if you fail to challenge them, their terms will take precedence.

2.    Get all payment terms in writing! 
To prevent misunderstandings further down the line, it is advisable to ask the customer to sign a written contract or order confirmation before goods are dispatched.

3.    Invoice quickly and efficiently 
The sooner you invoice, the sooner you get paid. Your invoices should include a thorough breakdown of all costs, dates and details of the product. It is worth noting that any mistakes at this stage can be costly as they could provide the customer with reasonable grounds to delay payment. If you have to reissue an invoice this will change the payment due date.

4.    Send a statement as soon as possible after the end of the stated payment date
The statement simply states the amount owing and the due date. Hopefully, this will be enough to encourage payment, but if not send a reminder letter.

5.    Send the first reminder letter 
This should be sent fairly close to the statement, perhaps a week later, to show that you are keeping an eye on the debt. At this stage, the letter should be polite, gently reminding the customer that they have not yet paid. A terse letter might seem more likely to illicit payment, but it could also have the negative impact of disenchanting a valuable customer.

6.    Follow up with a telephone call
If the reminder letter has failed to work, the personal approach is the next step. Try to speak to the person the invoices have been sent to. Talk through the specific details of the product and the dates when payment should have been made, as well as subsequent actions taken.

Now is the time to find out if they have any queries over payment, or if they are struggling to pay the bill and wish to pay in instalments. By the end of the call, you should have agreed a plan of action with regard to paying the debt.

Follow the call up with a letter, outlining the details of the conversation.

7.    Send the final reminder letter
This should outline the action you will take if payment is not made promptly – for instance, refusing future requests for credit or taking statutory action to recover the debt.

8.    Take legal action 

A last resort and no one relishes the thought of having to take legal action against debtors, but the money you are owed is rightfully yours by law.

Often you must become the aggressor when perusing debts because of the stubbornness as this debt could force your business to fold.


Sometimes patience just is not the answer, especially when your business is put at risk because of the debt. We recommend that you seek professional legal advice regarding any statutory action to recover your debts.


For more information on this matter please read more here

Construction recovery
Construction recovery