Tighten the whole cycle, not just the chasing. Agree payment terms in writing before work starts, invoice accurately and immediately on completion, make it easy to pay, and follow a fixed reminder schedule that starts before the due date. Most overdue invoices are late for administrative reasons, not because the customer cannot pay.
Common improvements include:
- Invoicing on the day work completes rather than at month end
- Checking invoice details against the customer’s purchase order before sending, so it cannot be queried
- Sending to the right person in accounts payable, not just your day-to-day contact
- Offering direct debit or card payment as well as bank transfer
- Running credit checks on new customers and setting sensible credit limits
- Reporting on debtor days monthly so you can see trends developing
Give one person clear responsibility for credit control. Where it is nobody’s specific job, it happens only when cash is already tight.
If you are owed a lot at any one time, invoice finance releases cash against unpaid invoices, and asset refinance can release capital from equipment you already own. Both come at a cost and neither fixes weak credit control, so treat them as complements to a better process rather than substitutes for it.