Late payment and how it affects businesses is an issue that still concerns businesses of all sizes but is particularly a problem for Small/Medium sized entities.

It is all too easy to get lost in the excitement of the sale and ignore the collection of the money. All entrepreneurs should repeat this maxim: "The job is not finished until the money is in the bank".

Let's remind ourselves of some of the steps which should be automatic:-

• Know your customers. For those that are major customers obtain good credit agency reports, visit the customers and get to know the appropriate staff who deal with payments. Also always deal with their queries promptly. For the smaller non-major accounts ensure you have the correct contact details and know who to ask for when phoning.
• Always make your credit terms clear at the outset and do this even during the sales negotiation. If the customer is going to have a problem with your terms you want to know at the earliest possible time. Credit terms should be consistently shown on all Order Acknowledgements, Account Applications, Invoices and Statements.
• Where customers are new, open the account properly so the recorded details are correct, decide credit limits and communicate these to the customer.
• Raise invoices promptly, send to a named individual and use first class post. Ensure the invoice is correct.
• Ensure your debtors ledger is ranked by how old the debts are and sort by largest debt first, so it is easy to see the important debts to chase.
• Learn quickly whether customers always need chasing before they pay.
• Be prepared to put a customer on "stop" if they do not pay.
• Have a procedure and follow it where customers fail to pay on time. Consider using a third party such as a debt collection agent or solicitor if necessary.
• Set a target for and monitor the average number of days debts are outstanding for. Measure your actual days against the target and strive to improve.

The list of good practice is endless, But the key message is be organised, be firm and don't be afraid to collect what is due to you.