Advice to manage your finances and cash flow

5 tips to stop late payments and get paid faster

28 April 2015

Here are some things SMEs can do to ensure faster payments:

1Sign up to Creditsafe

Creditsafe collects information on how quickly companies pay their invoices. Creditsafe’s customers share information and insights about payment times, highlighting poor payers and promoting best practice. There are more than one million companies on the database, providing a unique window into corporate financial behaviour. Armed with the data that Creditsafe can provide, SMEs can take better-informed decisions on whether to accept work or commissions from certain companies.

2Chase early

Be proactive and chase your suppliers for payment. Make it clear that you’d prefer to be paid electronically by digital transfer or Direct Debit, rather than by cheque. Also, if you’re waiting on a particularly large payment, don’t be afraid to make a courtesy call or write an email to the supplier to check they’ve received your invoice and that there are no queries about it.

3Claim interest

You have a statutory right to claim interest on late payments at 8.05% based on the ECB rate. Additionally, you can claim compensation for debt recovery costs. Letting your customers know this as early as possible may encourage payment.
*Source www.centralbank.ie

4Be flexible

Minimise the risk of delayed payments by providing flexibility around credit terms. For example, set up a facility for payment by credit card and think about offering discounts, such as 1% for early payments. Remember to balance the extent of any discount with the benefits of having an improved cash flow.

5Consider 'invoice discounting'

Invoice finance solutions can be ideal for small businesses in need of an immediate cash flow injection. ‘Invoice discounting’ is essentially a cash advance against the value of your invoices. So when you raise an invoice you’ll receive 85% of its value from a financier within 24 hours. You’ll retain full control over credit management. The financier simply gives you cash up front and you pay them back, plus a small admin fee, when you receive payment.


Get more FREE business advice

If you'd like to get more free business advice and information, sign up below..

*
*
*
*
*

Download a free guide to managing your cash flow

Free guide to managing your cash flow
Our guide is packed with expert advice to help you stay on top of your cash flow.
Get your FREE guide

Software to help you get paid faster

Sage Pay allows you to take payments and integrates seamlessly with Sage Accounts software.

  • Solutions to accept payments online, over the phone and face-to-face
  • Integrates with Sage accounts software
  • Advanced fraud screening tools
Find out more
Sage © Sage Hibernia Ltd 2017 . All rights reserved