Are larger companies less reliable when it comes to paying their invoices?

Discussion in 'Accounts & Finance' started by Dynumo, Feb 25, 2015.

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  1. Dynumo

    Dynumo UKBF Regular Free Member

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    Hi,

    Ever since starting to get larger companies as clients I've found that my cashflow has went crazy due to them stalling payments for months (often claiming to have sent the payment by bacs and then blaming my bank) and sometimes not even bothering to pay.

    I had always thought larger companies would be better at paying, but I now find my smaller customers to be the most reliable, even if they do sometimes send a cheque in the post on 30th day...

    Is my experience consistent with the experience of others, or have I just been unlucky?

    What would be the best way to screen customers in the future to avoid bad payers?

    Any other tips or techniques for dealing with this sort of issue? Should I just stick to smaller customers? Should I start charging a larger percentage up front?

    Even adding a 5% charge for late invoices seems to have went ignored, similarly to 5% off for early payments.

    Thanks,

    Adam.
     
    Posted: Feb 25, 2015 By: Dynumo Member since: Jan 18, 2009
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  2. john1989

    john1989 Guest

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    The bigger the company, the more chance of processes that have to be followed to get your invoice approved, on the system and finally paid. There will also be some element of bully boy tactics with some firms.

    Any credit control policies you have that are conveyed to the customer, you must enforce them. Such as the late payment fee you mention - if you don't enforce it, they will just see it as a weakness.

    You need a clear policy that you fully enforce. This should be made clear to the customer.

    If you can get money upfront, then do.

    Do you credit check any of the companies before offering credit? Big doesn't necessarily mean they have the ability to pay!
     
    Posted: Feb 25, 2015 By: john1989 Member since: Jan 1, 1970
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  3. Dynumo

    Dynumo UKBF Regular Free Member

    119 14
    I have definitely found that some firms appear to have a bully boy policy. It's unfortunate that I often find out too late.

    Could you recommend any credit checking services? I've been considering using duedil for prospective clients over a certain size.

    The problem with enforcement is that legal stuff seems expensive, and they often seem more able to afford a good lawyer than me. On top of that, being autistic I tend to have problems with certain forms of communication, especially when under stress... Is this something that an accountant could do for me if I had one, or are they more for end of year accounts and stuff only?
     
    Posted: Feb 25, 2015 By: Dynumo Member since: Jan 18, 2009
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  4. john1989

    john1989 Guest

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    I wouldn't pay accountant rates for something a decent bookkeeper could manage.

    You don't need to go legal. It's all about having systems for reminders, overdue letters etc.

    Can your business afford a bookkeeper with good credit control experience?
     
    Posted: Feb 25, 2015 By: john1989 Member since: Jan 1, 1970
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