With 15% of the workforce in the UK now self-employed, it’s not just the big businesses that need help with debt collection.
Chasing overdue debts can be difficult for any business – especially if you’re self-employed and the role of credit controller falls into your lap.

How to be your own credit controller

Whether you employ an external bookkeeper to help or not, chasing late debtors can be a difficult decision to make when you work for yourself.  Switching from a sales and delivery relationship to one where you are pressing your contacts for money can be a difficult transition to make. 
Whilst it may be uncomfortable to put on the debt collectors hat, it shouldn’t stop you doing it.  Prompt payment of your invoices is essential if you are to survive in your business.

Set clear payment terms up front

The key lies in setting the right expectations up front as this can help you avoid cash flow problems, client relationship breakdowns, and awkward telephone calls in the future.
If you work in the service industry, it’s wise to ask for part payment or deposits up front to safeguard yourself against any payment problems down the line.  Similarly, products should only be provided upon receipt of payment.  As a small business, your prospective customers may push against these payment terms and try to negotiate with you.  Remain strong in your conviction and remember that a promise of business is only worth it if you get paid for your work on time.
Be clear about your payment terms when you establish new relationships and reiterate those terms clearly on your quotes and invoices so that misunderstandings (and excuses) can be avoided.

Don’t wait to chase for overdue invoices

If you do run into problems with late payers, you don’t need to go in hard straight away.  Get on the phone and politely ask the person responsible when you can expect payment.  Don’t leave the call without your client telling you what day they will be paying you and by which payment method.
If the problem escalates and you suspect your customer has financial problems, it is worth speaking to a professional debt collection agency. The sooner you act, the more likely you will be able to recover monies owed to you before your customer’s cash dries up or is used for other more pressing suppliers.
To find out more, contact the friendly team at P&J Debt Collection Services.