Credit and Finance, Management, Small Business
How to avoid a late payment ‘horror story’ this Halloween
Halloween is the spookiest day of the year, and many adults and children alike enjoy dressing up, trick-or-treating and sharing horror stories.
Nowadays, we’re less likely to toss and turn thinking about ghosts or monsters under our bed. Instead, it’s the fear of customers not keeping up with payments that can give business owners many a sleepless night.
Although this horror story doesn’t involve ghosts or witches, an unexpected late payment from a customer can be even more frightening than an unexpected bump in the night, and can spell disaster for your business.
Experian has put together a number of handy hints and tips to safeguard your business from any unexpected spooks in the form of late payments this Halloween:
Lay down clear payment terms
Remember that it’s your right as a business owner to set out the payment terms before going into business with someone, so don’t feel pressured to adjust your usual payment terms to suit a customer.
It’s important to lay down clear terms, such as that the payment must be made within 30 days of the invoice being issued. You can also charge interest on payments if they go beyond that period. Make sure to also state your payment terms and send them to the customer in writing, so that they’re aware of the consequences of a late payment.
Insist on a deposit or instalments
One common late payment horror story is a customer vanishing without a trace and leaving you to pick up the pieces. However, to avoid this, it’s often a good idea to request a 50% deposit be paid straight away, and the rest of the invoice be paid in instalments rather than in one big payment at the end. This means that even if worse comes to worst, you’re not left completely out of pocket.
Carry out a comprehensive credit check
Carving a pumpkin lantern at Halloween was originally an ancient method of safeguarding your home from bad spirits, but thankfully there are more modern ways to protect your business from trouble.
With tools such as Experian Business Express, you can see a full picture of a business’ financial position, including their credit score and payment performance, so you can make an informed decision about going into a business with them.
A prospective customer might paint a perfect picture of financial health on the outside, when there may be underlying problems that could spell trouble when it comes to meeting payments. A sudden gap in cash flow, and the resulting problems for your business, is certainly scarier than anything you might find at a haunted house this Halloween.
Rather than just a one-off snapshot of a business’ credit score, Experian Business Express also provides lasting peace of mind, allowing you to monitor the businesses that you work with, and alerting you if anything changes.
All business owners know that sometimes it can feel like scary surprises are always lurking around the corner. Thankfully, with the help of business tools from Experian, you can rest assured that the late payment monsters are banished from lurking under your bed.