Red Box Virtual Office Newsletter - September 2007
How to Deal With Bad Debtors
It seems that dealing with late payers is something that we all have to face up to, sooner or later. As a small business owner, cash flow is one of the areas that either makes you or breaks you. A recent study by businesszone.co.uk found that 32% of businesses surveyed had past or current problems with bad debtors.
However, with some simple procedures in place, late payers can be dealt with, like checking a potential client's credit history or encouraging fast payment. The article at businesszone.co.uk has some great tips. In the UK, for example, under legislation there, businesses have the right to claim through the courts for unpaid fees. If that's not your style, spelling out your credit terms and conditions before you take on new clients is a worthwhile exercise; clients can never play the 'you weren't warned' card.
Talking about this to a colleague, she suggests adding interest to the invoice each month the payment is overdue. It may be an incentive; why pay more when you don't have to? Being tenacious is key. I am still waiting for a payment that is nearly 6 months overdue, but I'm like a dog with a very meaty bone and will not give up!
I also like to be paid up front, retainer style. This way my clients know what they are paying for, and the next round of hours/fees/work carried out doesn't commence until my fee is safely in the bank. The client knows that if he doesn't pay, the work won't get done.
At the end of the day, if a client is a persistent offender, is it worthwhile hanging on to the them? Could your time be better spent looking for new customers than constantly chasing a client that doesn't respect you, your time or commitment to them enough to pay you in an appropriate and timely way?
An Audience with... Red Box
Recently, Red Box was asked for their words of wisdom regarding hiring and working with a VA. The result is our Interview with Mentors and Experts at Maya and Marketability. We talk about gaining back your time and increasing revenue by using a virtual assistant. I hope you find it of interest.
