With continued speculation in the news about a possible
postal strike, the Better Payment Practice Group (BPPG) has issued advice
to help businesses
keep the cash coming in.
It’s easy to use postal disruption as an
excuse to ignore or delay the payment of invoices, but by thinking ahead,
firms can do much to minimise
the likelihood of customers using this as a reason for late payment.
The
following advice will also help businesses to collect cash in the longer
term.
- Advise customers that you wish to be paid directly into your
bank account. You can do this in advance by letter or during a strike
by e-mail, by
providing your bank account details and giving each customer a reference
number so you can identify their payment on your statements
- Ask customers who regularly place orders to set up a standing order
with their bank to pay you a specified amount each month to cover goods
purchased.
- Consider offering an incentive to firms that agree to pay by direct
debit, perhaps a one off bonus, or a discount, but be careful to cost
any discount or bonus offered.
- Ask your bank for paying in books on your account and give them to
customers so that they can pay their invoices at their bank. Remember,
you can fax or email invoices to the customer instead of posting them,
and always provide a reference number to help reconcile statements.
- Personal visits to customers located near you to deliver invoices and
collect payment can also work well. There is no need to antagonise the
customer by arriving unannounced and asking to be paid. All it takes is
a quick phone call to explain the situation and to agree the method of
payment. If cash payment is involved, a proper receipt must be provided
for security reasons and to ensure no misunderstandings occur.
- If you need to use a courier company to visit customers to collect
payments, it may be wise to set up such a facility now, as in the event
of postal disruption, you may find these companies are swamped with enquiries
and you may be left disappointed.
- Consider if a different approach is needed for large customers with
high value orders as opposed to smaller customers who regularly order
small amounts of goods.
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