For any small business, making sure invoices are paid can be a big job in itself. If they’re not managed properly, payments can be consistently late, and your relationships with clients might suffer as a result.
Even more significantly, you’ll struggle to keep cash moving smoothly through your business. No cash, no business. (more…)
There has been much talk recently about freelancers and contractors struggling to get their invoices paid by the agencies or end clients.
With the credit crunch hitting cash flows hard, the bigger companies are often guilty of extending credit terms without your say so. If, firstly, the client delays in paying the agency and then they delay in paying you, it’s added weeks on to money that would be better off in your bank.
So what can be done about it?
Sadly, there is a real culture of late payments in the UK. For business to business transactions, most firms automatically expect 30 days credit. In fact, if you don’t agree different terms, the law says businesses can take 30 days to pay by default.
If you find yourself lucky enough to be supplying very big companies, you will sometimes find they demand 60 or 90 days to pay, or maybe even longer.