Late payments to UK small businesses are on the rise, putting pressure on cash flow and making it harder to cover day-to-day costs. If you’re regularly chasing invoices, you’ll know how quickly it starts to affect the business.

According to recent research, payments are delayed by more than a week on average.

And when your customers don’t pay on time, this late payment can cause a multitude of business problems. Not only does your cash flow take a dip, but working relationships can be damaged and hours of business time can be wasted chasing up these overdue payments.

So, here are five straightforward ways to improve your payment times.

Offer flexible payment options

The easier you make it for customers to pay, the better. Provide your customers with a variety of payment methods, including credit cards, debit cards, regular Direct Debit payments and payment gateways like PayPal or Stripe.

Send your invoices out on time

The customer can only pay once you raise an invoice. Make sure you send invoices out in a timely way, and that the details are accurate and clear. Break large invoices up into smaller payments that get sent out when specific milestones are reached in the project.

Offer discounts for early payment

Customers won’t pay before the invoice due date unless it’s in their interest to do so. But you can incentivise customers to pay their invoices early by offering discounts for fast payment. For example, if payment terms are usually 30 days, offer a 2% discount if the invoice is paid within 10 days.

Get proactive with your credit control

Check your aged debtor reports regularly and chase up invoices that are overdue. Politely reach out to the customer and remind them of the outstanding balance. Sending automated notifications from your accounting software can also help to provide some impetus for customers to settle their bills.

Consider invoice finance

In a worst-case scenario, where payments are well overdue and cash flow is suffering, it’s worth considering invoice finance. Selling your outstanding invoice to a financing provider gets you the cash you need now, while passing the debt to the provider and allowing the customer time to breathe.

Talk to us about reducing overdue payments

If late payments are becoming an issue, it’s important to take action fast! Talk to us by booking a call with Donald Inglis or call 01904 787 973 to find new ways to speed up payment times.