If you’re a small medium (SME) enterprise in the UK supplying goods and services to other business customers (b2b), chances are you have experienced at least one late payer along your journey.

The knock-on effect this can have on your business can be crippling especially when you have high operating costs and working on tight margins in high volume products. Just one false move can bring your whole business operation to it’s knees and begin a downward spiral with less hope the further it plunges.

There are however some effective ways to gain control of late payers and bring them into line.

1. Effective credit control - if your business has stretched resources then outsourcing your credit control operation’s is a good idea so that you can focus on your strengths and let somebody take the burden away from setting guidelines with suppliers. It is often the case that small businesses have a close relationship with some of their suppliers and find it very awkward to ask for payment often leaving it well beyond terms until they ask for payment. Outsourcing this to a third party agency can take the awkwardness away from you so that they ask all the difficult questions.

2. Many are worried that if they do ask they will find themselves surplus to requirements from their customer and they will instead look elsewhere. If you’re a business making quality products and services and deliver your products on time this is invulable to many businesses and a lot more uncommon than you think. If your delivering your end of the bargain on time your in a strong position to challenge persistently late payers as they are more likely to want to keep you onboard due to the expertise and promptness and you will often find simply ask nicely but firmly will get you what your entitled to.

3. Be firm from the outset. Set out all your rules on payment terms before you begin supplying your customer and have then acknowledge this. Let them know you know your position and use the Late Payment Act 2013 perhaps as a deterrent in your initial contract or agreement so they know that they will receive a penalty if they are late. The legislation is on your side so don’t be worried about referencing Late Payments Act.

4. Create a powerful Invoice and Quoting system template. Invoicey can help you with this (see templates). Get all the relevant information on an invoice or quote. Certainly by giving them a quote with the T&C’s on there will at least give them clear prior notice of your intentions if invoices are not paid. Our Invoice booster can help you create a power Invoice.

5. Request a deposit or insist on the first few payments on a pro-forma. If you have a new customer insist they pay a deposit or the first so many invoices on a pro-forma so you receive funds upfront to help alleviate the cash flow burden. Then when you begin to gain a good business relationship you can then opt for more flexible payment terms though always maintain your stance if they are paying late.

6. Use exceptions sparingly. If a company pays late way beyond the terms, try not to bend to their will and give ground. By doing this you will then set a precedent going forward that you are a soft touch and will then open the floodgates later down the line if/when it happens again. Of course there may be genuine exceptions but keep this to a minimum. By using our automated services this often takes the burden out of your hands as the system will determine it not you. Displacing the need for you to take any personal responsibility.