Late payers are a problem for every small business, and IT consulting is no different. Late payment can cause serious cash flow problems for your business. This article sets out to provide five tips to help chase your late payers and get a handle on credit control.
Chase payments consistently. Always make sure you chase outstanding invoices within the same time frame. For example, if you perform IT consulting work under 30-day payment terms, ensure that you (or a member of your staff) chase every invoice on “day 31.” Before long, customers will know that you are going to chase payment as soon as any invoice becomes overdue.
Make payment terms clear. Ensure you state clearly on your invoice when you expect to be paid. If you can find a suitable moment, discuss your payment terms with clients verbally at an early stage of your relationship.
Get on the phone. In the early stages of an invoice being overdue, a phone call can prove far more effective than an email. If an accounts department knows you are willing to phone them up and hassle them, they may well pay your invoices to avoid awkward conversations!
Have legal terminology ready. Ensure you have a set of standard letters to send out when payment becomes unacceptably overdue. Take legal advice in your country of business to obtain the correct phrasing. In some countries you can legally charge interest on outstanding invoices.
Consider withdrawing service. If a client shows no sign of making payment, you could be risking more money by continuing to provide an IT consulting service. In serious cases, you may wish to consider withdrawing your services until payment is received. Do take into account, however, that this could lead to an irreparable breakdown of the client relationship.
How do you chase down your IT consulting invoices when they are paid late? Share your methods in the Comments box below.
And to follow-through on the tips introduced in this short article, be sure to download your free copy of the special report on How to Start a Computer Consulting Business: 6 Proven Ways to Build Your Initial Client Base.
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Topics:- Computer Consulting Business