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How long do you wait to get paid?
Get paid, As small business owners, here’s a sobering report from today’s Times newspaper:
‘Small companies bear the brunt of a culture of late payment of commercial debts, with businesses paying their smallest suppliers an average of 30 days after their biggest trading partners”.
In fact, it goes on to state that suppliers invoicing for less than £10,000 a year, don’t even get these processed for 35 days after receipt – making the 30-day payment terms normally offered pretty irrelevant! They’re quoting an article written by a FinTech company called Previse, which has a vested interest but it certainly rings true. You can find their website here: Previse
In many ways, not entirely surprising, as the biggest suppliers will have more clout and influence, but it continues to make life even harder for us small businesses.
So what can we do to get paid?
You should take a proactive approach whenever dealing with a bigger company and call to confirm receipt and ask for when it will get paid.
Forget being ‘nice’ and worrying if you take a harder approach it will damage the relationship – it won’t if you remain professional. Diarise and chase by email and phone.
If you can, get a name you can start to build a relationship with.
Use a different email address such as accounts@ to separate you from your ‘accounts’ department, helping to keep things professional.
Most importantly plan your cashflow by assuming they will pay late, so it comes as no surprise and causes you real difficulties. If you have a problem, take steps to raise cash early, possibly against their invoice, in plenty of time. Remember lenders like a proactive approach demonstrating we know our numbers and are thinking ahead but take a dim view when we leave to the last minute.
There is a Small Business Commissioner, a Government Department which has some useful information, albeit some is very simplistic: Small Business Commissioner
We can advise on this issue so please contact me.