As mentioned in point 2 above, you may have contracts or ‘terms’ in place with your debtors. If so, the terms or contract should state when you expect payment. Most small businesses state 30 days from the date of the invoice. Whatever your terms, if you have not received payment within the specified period, it is important you follow up immediately with your debtors once payment is due.
For various reasons, many people do not like making telephone calls looking for payment from their debtors. This is the one area you should learn to become comfortable. Overcoming any awkwardness or shyness talking about money is very important. We are dependent on ourselves, when self-employed, to ensure cash comes into the bank and we can pay our suppliers or staff. For that reason, this is one of the most critical areas of your business, cash collection.
For many small businesses that may be on your debtor list (if they have cashflow issues), unfortunately, payments tend to be made to the businesses who actively chase cash hardest. If someone is getting an emailed statement from one supplier or a telephone call from another (or even a visit, if necessary), it will be the visit or the telephone call that will prompt the quickest payment.
Obviously, this is very unfair, however, it is a reality many small businesses face and for that reason, it is most definitely the most important of the Top 3 Tips.