The latest exclusive article for SMEWeb from Small Business Commissioner Emma Jones CBE. Emma runs the independent public body that tackles late payments and unfair payment practices.
The contract is secured, work delivered, and invoice submitted with a due payment date. Sound like a familiar journey for a business? The outcome at the end of this is a fair expectation to be paid on time, but there are actions you can take to assure the likelihood of this happening.
- Before sealing the deal: even ahead of winning contracts, you can be prepared by uploading company details and policies to procurement platforms to reduce the time of onboarding ie the time it takes before receiving a Purchase Order number. If selling to the public sector, create a profile on the Central Digital Platform, and if trading with corporates, look at the supplier platforms they use and pre-register. The most well known platforms include Coupa, Jaegger, SAP Ariba, Oracle.
- Payment terms: we have written about this before on SMEWeb but when the contract is shared, check the payment terms to ensure they can work for you and your cashflow to deliver the contract. If clients are issuing contracts on more than 60-day terms, let them know that government is taking a Bill through Parliament to move the UK to maximum 60 days and negotiate on this basis. I’m hearing from small firms who are having this conversation and getting their payment terms updated.
- Invoice details and contact point: check up front for any detail required when it comes to including on the invoice and how to submit. This will save time in the long-run as no-one wants to be in the position of finding out on payment due-date that due to error, the invoice has to be re-submitted.
- Tech prepared: if you are using one of the cloud accounting software products, activate the ‘invoice chasing’ feature so it can take care of credit control on your behalf.
- Client recognition: for prompt paying clients, recommend that they join the Fair Payment Code so other SME suppliers can see they take payment seriously.
Taking these steps up-front will place you in a strong position to ensure those invoices get paid on time.
