For many businesses maintaining cash flow and ensuring payment is received promptly and in full is one of the biggest headaches in managing their business. Even profitable companies can fail due to a shortage of cash.
The Minister for Small Business, John Perry TD, recently promoted a new requirement that Government Departments and Agencies are compliant in paying their business suppliers within 15 days of receiving a valid invoice. As part of that interview he also encouraged the private sector to follow this lead in their dealings with SME suppliers.
In his opinion “there is scope for enterprises of all sizes to improve their payment performance… It is vitally important, that small businesses are paid quickly, so that they, in turn, can pay their respective creditors.”
Things can get tricky when you find you are paying your suppliers out of your own pocket. The key to success is to ensure that there are no surprises on either side.
So it is with this in mind that the team at MCIS have put together a list of tips to help your invoice get to the top of the pile and help your business get paid in full when you expect it:
- Agree your payment terms up-front with your clients.
- Establish who is the right contact on their team.
- Does the client require a Purchase Order or PO number on each invoice?
- Find out if there is anything else required by the client before you can get paid.
- Make sure you include your bank details on the invoice to facilitate electronic transfer. Where payment is coming from overseas you also need to include your IBAN number.
- Find out if your client has a payment run during the month and if so how many of these are there?
- Contact your client after 7 days of sending the invoice to make sure they have received it and are happy. Make sure you ask them on this call when receipt of payment is due!
In a small business that may not have a dedicated accounts resource, the responsibility falls upon your shoulders. So it is vital that you set aside a morning or evening each week where you focus on invoices only. Some questions to ask:
- Are you on top of your invoices due?
- Have you followed up on any outstanding invoices?
- Most importantly, do you know where you stand in relation to all the invoices due for payment?
Call us on 01 8404029 if you would like to discuss this subject in more detail with us!