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woodman

  • Posts: 1069
Getting Paid on Time
« on: August 27, 2003, 09:50:36 pm »
Getting paid on time has become a major issue to small companies especially when dealing with larger organisations and cleaners are no different to any body else on this issue.

>:( We need paying on time ie 30 days max.

I hope you all have proper credit control procedures in place  because with out this you can end up all over the place on outstanding invoices.

All you new start up's make this a priority otherwise you could be in serious trouble before you've even begun.

Many a business has gone under within the first year because of bad debt and not through lack of work.You must ensure your clients know when payments are due and the consequences of not paying on time ie fine, interest etc.
There is new legislation in place now to help you,make use of it it's all legal and on your side.
If need be I can post on here the nuts and bolts of it for your files.

Happy Cleaning.


Mike_Boxall

  • Posts: 1394
Re: Getting Paid on Time
« Reply #1 on: August 27, 2003, 10:10:47 pm »
Hi Woodman
Yes, this is a good point to raise as I've seen several start-up related questions on the board recently.
There is always a risk when you are starting a business that you concentrate on sales at the cost of bad debt.

Businesses need to get into the habit of stating that quality work at keen prices is offered on the basis of prompt payment - once you do your bit the customer has an obligation to settle promptly.
Unfortunately, I have seen many a good contract cleaner go out of business through, not just non-payment but also slow payment from customers.
With the high proportionate cost of employee wages which have to be paid on time, contract cleaners are more vulnerable than most. Always spread the risk and never get in a position where you are regularly relying on the payments of any one customer!

The first lesson of business is:

A sale's not a sale until the cheque's in the mail!

Derek

Re: Getting Paid on Time
« Reply #2 on: August 27, 2003, 11:32:19 pm »
Hi Guys

A very valid point...

I was given some useful information on this subject some years ago which helped me.

On commercial work most Companys that you do business for will close their books for the month around the twentieth of each month.
Always make sure that your invoice goes in before that closing date or you will wait an extra month.
Follow this up within a few days with an up to date statement of account.

Many Company's will pay on the statement only leaving the invoice to go through its processing procedure within the accounts section.

You can charge interest on overdue accounts these days so long as you advise your customer via your Trading Terms and Conditions.

Hope this helps

Derek

woodman

  • Posts: 1069
Re: Getting Paid on Time
« Reply #3 on: August 28, 2003, 11:42:15 am »
Hi Mike

I would go one further and say:

A sales not a sale until the cheque has cleared :)


Mike_Boxall

  • Posts: 1394
Re: Getting Paid on Time
« Reply #4 on: August 28, 2003, 12:04:48 pm »
But that doesnt rhyme! ;D

Alex

  • Posts: 232
Re: Getting Paid on Time
« Reply #5 on: August 29, 2003, 03:00:57 pm »
what about factoring (I think this is what it's called), I believe this is a good way of getting paid however you lose a couple of % from the bank.

woodman

  • Posts: 1069
Re: Getting Paid on Time
« Reply #6 on: August 29, 2003, 07:49:58 pm »
Hi

Your right it is called factoring

This is ok if have about £15000 or more outstanding otherwise the banks don't want to know there's not enough in it for them otherwise.