How much more cash would be in your bank if all your customers paid you on time?

Getting paid for the work you’ve done is probably the most important thing for any business, and yet we find many don’t give it the focus it needs.

Maximising the cash in our client businesses is the first priority for us, and a key part of this is implementing an organised, friendly approach to asking their customers to be paid on time.  This starts by building a great relationship with your customers’ accounts teams, picking up the telephone and asking the right 4 questions.

1) Did you receive the invoice OK?

  • It’s obvious but the most common reason for not getting paid is that the customer hasn’t received the invoice (or at least that’s what they claim…..).
  • If the answer is no, then be ready to email a copy to the person you’re speaking to whilst you’ve still got them on the phone.
  • Even if the answer is yes, check that the invoice arrived by the best method for the customer. e.g. Is email preferred to post, and if so could it also be copied to the person who approves the invoice?

2) Is everything ok with the invoice?

If they received the invoice, check they have everything they need to pay it.

  • Do they need their Purchase Order number quoted on the invoice?
  • Do they need any additional information such as a proof of delivery or timesheet?
  • Is their company address correct?
  • Does it show your VAT number?
  • Have you included your bank account details so they can pay you electronically?

If the invoice doesn’t give them everything they need then fix the problem straight away, and remember to change your processes so that the problem won’t repeat next time.

3) Has the invoice been approved for payment?

It might be that there’s nothing wrong with the invoice but the issue is that it hasn’t been approved for payment. Some finance teams won’t see getting your invoice approved as their problem, so query who has to approve your invoice and ask to speak to them straight away.

4) When will the money be in our bank account?

This is a very specific question and it needs to be.

  • If you just ask “when will our invoice be paid?” you’re likely to get the answer “it will be on our next payment run”.
  • You want a commitment to a specific payment date that you can hold them to, so you need to know when they will process the payment run (is it a set day or just when they get around to it?)
  • Also their method of payment (same day electronic, 3 day BACS, or a cheque sent 2ndclass post?). Make sure you get this information so you know when to chase them.

These are just four simple questions to ensure you can improve your bank balance, BUT the important thing to realise is that you need to ask all these questions before the invoice is due for payment.

If you need help with your invoicing process please get in touch with our regional team on 01252 820002 or email hello@yourrighthand.co.uk. We’re always happy to help and offer a free two-hour initial review to help you understand how to make these valuable changes to your business.