credit control by sending your customer a 1st class stamped envelope

In my last blog I pointed out the need to submit your invoices quickly and to make sure the text and £amounts are correct. Obvious advice of course, but often not heeded  – to the detriment of cash flow.

Ensuring your customer pays you asap is the next objective.

So, two or three days after mailing your invoice, call the customer to check ;-

a) they have received it and

b) they have no problem with it  – if so, remind them of the payment terms, pleasantly but firmly. Don’t wait until  the due date has passed to call them, only then to find that they haven’t received your invoice.  Or pretend they haven’t.

If your customer is a small, owner managed, business, try enclosing an SAE, with a first class stamp (not second) with your invoice and remittance advice.  He won’t bin a first class stamped envelope and so it tends to sit on his desk, a constant, nagging, reminder  to pay you.  Eventually, to ease his conscience, it’s easier for him to get it off his desk and out of sight by posting it back to you with his cheque.

If the customer is a large organisation it is essential that you understand their ‘accounts payable’ procedures to which you have to adapt in such a way that minimises your exposure.

One customer of mine a few years ago won a contract with a sizeable retail chain who paid 60 days after the end of the month in which they logged the incoming invoice against their original purchase order. Since he paid his suppliers almost on a  ‘proforma’  basis, by the time I got involved he was almost out of  business.

I sent him to meet  Mrs X, the accounts manager, armed with a big box of chocolates and a bottle of champagne. He made friends with her, explained his position, she showed him how best to submit his invoices to her department, exactly when to do so, and asked him to call her each time so she would prioritise his invoice.

Her help, coupled to my renegotiating payment terms with his suppliers and a loan from his bank (those were the days!) kept his business solvent.

 

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