Top Tips
Do not assume that the customer will pay

Why invoicing immediately helps you to get paid quicker:

A sale is not a sale until the money is in bank. And gone are the days where you could automatically assume that the customer will pay you, be it 7 days, 20th of the month following, or end of month.

Have invoices ready to be sent when the goods or services are provided. If you are unable to include an invoice at time of delivery then send it by post or email as soon as practically possible. Don't give your clients the opportunity to obtain extended credit by sending it, or a bunch of them, during the first week in the next month. This is the perfect excuse for your customer to then pay 20th month THE FOLLOWING MONTH!

Make sure that your customer's purchase order does not impose different payment terms.

Also be wary of large companies who arbitrarily impose extended terms of payment. Whilst this practice is not that common in New Zealand, many of the multi nationals like Microsoft and Del Inc are known for this policy. As is Tenix Alliance in New Zealand. If you know of others, please let us know

An invoice will not be paid if:

Sending Statements also helps you get paid quicker

As with all correspondence sent to debtors, you should send statements to a named person or to a job title, such as credit controller, finance director or managing director. It is also advisable to re-state the terms and conditions as they appeared in the original order acknowledgement and invoice.

The purpose of a Monthly Statement is:

Your Monthly Statement is essentially your first arrears letter. Therefore, they and you know that state of their account, which is why it is important to generate and send Monthly Statements early.

Having a copy, or access to, a Monthly Statement when you phone your customer about any unpaid invoices gives you both a clear reference point for you conversation.

Late payment charges and interest:

Apply your collection process the day after the account falls due: The longer a debt is overdue the less likely it is to ever be paid. If your credit policy / Terms of Trade is to be paid on the 20th of the month following and is not, get on the phone on the 21st.

Make sure all your customer agreements and contracts clearly state that you intend to include and pass on the costs for any collections onto the customer. Set out penalties if payment is late – you do not have to invoke them, but it must be included and written in the contract up front, so that there's no confusion later

The point is it has to be stated so in the beginning.

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