For any small business in any industry, receiving due payments in a timely fashion can be a major source of worry. Whether you’re established or have recently set up in business, cash flow can often be a finely-tuned part of the business and so any small problems can have a huge impact on the business.
As the most important aspect of any business, getting paid is ultimately the goal which determines the success of a company and also one of the biggest challenges facing small businesses across the country.
See also: How to deal with late payment
While all business deals should be based on a legally-binding contract, the payment structure and schedule should be a part of this agreement. This can also include the delivery method and any penalties which will be incurred for late payment.
The biggest problem for small business lies in the fact that they often can’t stipulate too many terms as an overly-complicated contract could lose any potential deals. While the needs of the business must also be considered, there’s often a fine balance to be struck between these two extremes. The nature of your industry and the practices already employed as standard may well dictate how this is conducted.
Technology can also play an important part, with many new methods of payment available to help ease and hasten payment upon completion of a project. This can range from automated invoicing which can provide a client with more time to arrange payment, through to an increased number of platforms available to the customer to pay, making the entire process quicker and simpler for them to authorise.
An old trick is to offer a reward to the client for early payment. This not only ensures that payment is received on time, it effectively provides two separate deadlines for them to pass before the payment becomes outstanding.
As a last resort, threatening or carrying out litigation may be your only chance of recovering the debt. If this last option is chosen, it’s vital that you use a well-known and highly reputable company as their image is also reflected in your own business’s image because they’re a company whom you have chosen to make a business partnership with.
While sourcing overdue payments can be a major problem within your own country, the problem is magnified by many times over when a client is located in a different country. In a world where more emphasis is being placed on digital commerce, this is becoming a problem facing an increasing number of businesses.
When this situation arises, taking a legal route is often the only viable method to claiming debts and retrieving due payments. While it should not be the first approach you take when a payment becomes overdue, it offers a viable solution to ensuring you receive at least part of the outstanding money which your company is owed.
If you find yourself in need of commercial collection within the borders of Canada, visit us here for details of how we can produce a cost-effective strategy to help you. With over 30 years experience in this field, our debtor/creditor team are experts at producing quick and successful conclusion.