As the country prepares itself for a mass belt-tightening the likes of which haven't been seen since the early 80s, it's more important than ever for freelance coaches and trainers to manage their finances. Read our handy guide to ensuring you get paid on time, and still keep things sweet.
According to family-run finance firm, Bibby Financial Services, British businesses are now waiting an average of 61 days for payments - a figure it describes as an "an all time high" since the passing of the Late Payment of Commercial Debts Act of 1999.
"Many small businesses are reluctant to ask larger companies to pay on time for fear of damaging relationships with key customers and ultimately losing business," explains Bibby chief executive, David Roberston.
But he says that small businesses should remember that they have "the law on their side" as well as the right to charge interest on late payments.
So how can independent trainers manage their credit control procedures more effectively and avoid falling in to the late payment trap? Here are some handy guidelines to follow:
Check it out
While winning a new customer is great for the business, check the company in question is credit worthy before you commit valuable time and resources to getting the relationship off the ground.Agree in advance
Agree terms of payment with new customers as part of the sales and contractual process. Make it clear the price of your goods and services is linked to the credit terms you offer and that you have a legal right to claim interest on late payments.Kick the habit
Identify habitual late payers and contact them to talk through the situation. Forging good working relationships with your customers and suppliers will make it easier to resolve any payment problems when they do arise.Invoice immediately
Make sure you lead by example and get statements and invoices out on time. If you don't do this you can't expect to be paid on time.Make it clear
Make sure your invoicing is accurate and sent to the right contact at the right address at the right time, stating clearly when payment is due.Collect on time
Have a collection timetable and stick to it. If a promised cheque fails to arrive, chase it again straight away. For further piece of mind ask for a cheque number.Communicate
Maintain regular and open communications with your clients and suppliers. Where possible, ensure they are made aware of any invoices due in advance to help them keep on top of payments.Keep clear records
Log all correspondence with customers, including emails and telephone conversations.Be upfront
Don't be embarrassed about discussing money. Remember, if you've kept to your part of the deal you have the right to be paid. Be polite but firm.Review procedures
Aim to run credit checks on your clients on a bi-annual basis. If the ownership of a business changes, you should reassess its creditworthiness.
Finally, Bibby notes that it's important to know the law: "If you have a long outstanding payment, consider charging the client interest. As a small firm, the law gives you the right to charge interest on all late payments owed to you."
Remember,the rate you can charge is the Bank of England base rate, plus eight percent.
