7 day payment terms - invoice overdue already, hwo soon to chase?

[Platypus]

then you start chasing it before it is even due to be paid.

Poor advice IMO.

IME real businesses do not like being phoned up to ensure that an invoice will be paid on time.

[escapeUK]

Poor advice IMO.

IME real businesses do not like being phoned up to ensure that an invoice will be paid on time.

Well of course they dont, then they can not pay it. The clientco I contract for will not pay anyone who hasnt chased, one chase will put you on a payment list but you might be bumped off it if cash is tight, two chases means you are serious and will get paid.

[SarahL2012]

If you are serious about getting paid on time then you start chasing it before it is even due to be paid. Get to know the people in the accounts team and make sure everything is in order and approved ready to be paid on schedule. Keep following it up to make sure there are no problems because they will probably just let it fail rather than pro actively contacting you...

Speaking as an accountant who has had many an Accounts Payable department under her remit in ex-permie roles, this is exactly the right approach to take!

When its your first invoice start off with a really polite email / call to the AP department just saying that you've sent in your first invoice, due on xth day and does the AP team have everything they need from YourCo to make payment on time?

I always let an invoice go 48 hours overdue without sending a reminder, but then polite email (written evidence) to AP department reminding them that YourCo was due payment 2 days ago is starter.

After that you need to get a bit firmer and also say that you may put statutory interest charges on the invoice. Keep copies of emails and if you get to a month overdue then send a formal letter saying that you will involve solicitors etc and company will have to pay legal charges (plenty of templates if you google)

No point in waiting around. A fellow contractor is working with a company who did a systems transfer a few weeks ago and automatically put ALL suppliers onto 60 day payment terms. They're waiting for suppliers to phone up about non payment before they 1) pay them and 2) correct the payment terms on the system.

[Safe Collections]

Poor advice IMO.

IME real businesses do not like being phoned up to ensure that an invoice will be paid on time.

Conversely, many real businesses like to ensure that invoices they have issued have been received and that they are free from queries and the like before the payment date.

But each to their own...

[Old Greg]

Conversely, many real businesses like to ensure that invoices they have issued have been received and that they are free from queries and the like before the payment date.

But each to their own...

You're a snide one, aren't you?

The OP was making a perfectly reasonable point about how to approach client relationships. I rather agree. I assume the people I am doing business with are straightforward unless I have reason to think otherwise.

[Wanderer]

You're a snide one, aren't you?

I don't think it's snide at all.

It's not at all unusual for a businesses to contact their creditors in advance of the payment due date to ensure that everything is Ok and the payment will be made on time.

Thinking back, it was probably one of the first lessons I learned about business as a young boy watching how my dad operated. Firm but fair with the creditors and it cuts both ways - your creditors have to pay you on time so you can settle your own debts on time.

Not everyone's business runs at a massive profit like contractors do, so good cashflow and credit control can mean the difference between the success and failure of the business. I know that one from bitter experience.

[Safe Collections]

You're a snide one, aren't you?

The OP was making a perfectly reasonable point about how to approach client relationships. I rather agree. I assume the people I am doing business with are straightforward unless I have reason to think otherwise.

We aren't being snide, that post was directed to Platypus and his statement that real businesses don't like to be called prior to an invoices due date. It was not directed at the OP.

I don't think it's snide at all.

It's not at all unusual for a businesses to contact their creditors in advance of the payment due date to ensure that everything is Ok and the payment will be made on time.

Thinking back, it was probably one of the first lessons I learned about business as a young boy watching how my dad operated. Firm but fair with the creditors and it cuts both ways - your creditors have to pay you on time so you can settle your own debts on time.

Not everyone's business runs at a massive profit like contractors do, so good cashflow and credit control can mean the difference between the success and failure of the business. I know that one from bitter experience.

That final paragraph sums it up for us. Every company, irrespective of size and industry need to make credit control a key part of the business. Leave it as an afterthought and it will be a case of when, not if, your company gets burnt by a non-paying customer.