Don’t get taken for a ride

By Charles MacMillan, partner and head of corporate recovery, Beever and Struthers

The golden rule is that a job isn’t done and dusted until you get paid.

Indeed, if you let your customers get away without paying you’ll have the highest turnover in the world and nothing to show for it. Cash really is king.

Secondly, don’t feel embarrassed to ask for payment. You’ve fulfilled your part of the bargain and it’s their turn to return the compliment. It’s hard enough to fund your business and you don’t intend to fund theirs by extending free credit.

Bad debts are the worst type of overhead but you can influence them.

Create good habits and call your customer the day the debt is due and every seven days thereafter. The nuisance factor will embarrass them into payment. Once you have done this several times send a seven-day letter threatening legal action. In the vast majority of occasions this does the trick.

If you’re too embarrassed to make those calls, or don’t have the resource, consider debt collection agencies or invoice discounting.

Organisations such as these have access to a vast array of credit information and can advise you on the creditworthiness of all your customers.

Above all, don’t fall into the ‘can’t upset this customer’ syndrome. A customer who doesn’t pay on time has no right to be offended and a customer who doesn’t pay isn’t worth having