Late payment of invoices is a problem for any business. It creates cash flow problems, makes planning impossible and wastes valuable time and resources. At Coface we help thousands of companies throughout the world to avoid late payment and bad debts – so here’s our quick eight-point guide to giving yourself the best chance of having invoices paid on time.
1. Research first, credit terms later
With up-to-date financial health checks available on any UK or global company, there’s no need to ever offer credit terms to a company without knowing its current creditworthiness. Always ‘Coface it first’.
2. Rely on a contract, not a handshake
Your payment terms need to be enshrined in a contract, as does your continuing ownership of the goods until payment has been received – lessening the temptation to delay payment.
3. Keep your paperwork
If you have indisputable proof that goods were received and found acceptable, there are no grounds for late or non-payment.
4. Stick to the credit limits you set
Don’t be swayed by a few on-time payments. You made an informed decision when setting the credit limit, so stick to it until you have new information.
5. Case bills firmly but politley
Chasing payment can be time-consuming and a frustrating distraction from other important tasks. But our advice is “don’t get mad, get paid”. Being angry or aggressive can cause resentment and risks putting you in the wrong. Outsourcing is one solution. As a Coface credit insurance customer, you have access to our highly professional debt collection service. Plus resources such as credit checks to help you reduce the risk of bad debt.
6. Monitor your customers’ payment behaviour
If anything changes or strikes you and your team as unusual, there may be a problem you need to investigate.
7. Get expert help to manage risk
No-one could be more expert than Coface. We’re a world leader in credit insurance, active in 200 territories and with deep knowledge of every industry. We can also offer invaluable advice if you are considering changing a customer’s credit limit, or if you believe there may be an enhanced risk of non-payment.
8. Protect your cash flow with credit insurance
With a tailored Coface credit insurance policy in place, your cash flow is as secure as it can be, and you have the peace of mind of knowing that if a customer does delay or default, you can claim back the cash.
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As the lockdown restrictions ease, the Government has given more businesses the green light to start operating again, provided they can observe the necessary social distancing and infection control measures.
Many may have seen the welcomed announcement by the Government on their intended support to the UK Credit Insurance Industry. We are actively participating with the ABI and government representatives but it is difficult to