“Good credit management starts with your own systems. The best way to ensure that you get paid promptly is to ensure you have good systems in place that increase the cashflow into your business and minimize the risks of not getting paid. These five steps will help you strengthen your cashflow and eliminate many debt problems before they occur. Have a cash reserve that you can use for refunds when necessary. That way you won’t be hesitant about taking payment up front. A cash reserve will also be helpful for improving your cash flow in the rare situation where you don’t get paid on time.”
One of the toughest things you must do as a businessperson is get paid! You work hard for your clients to provide them with a valuable service, and then spend months chasing your money. The truth is, many business to business invoices get put on the back burner, because unlike credit card companies who will immediately report the late payer to a credit agency, the smaller business will usually not do this. If you can set up incentives and protections before you even begin the work, you will save yourself a lot of time and trouble.
1. Make your payment policies clear at the time your services are retained.
However your business is approved, whether it’s by a client meeting, or by you submitting a bid, at some point, your client must agree to your estimated price for the work they want done. If your payment policies are stated clearly on your contract, bid, or whatever document you use to bind the contract, you are ahead of the game.