If you want clients to pay their accounts on time, these are just some of the things you must do. The checklist below is by no means comprehensive but if all of these are implemented, you’re well on the way to getting most of your invoices paid on time.
1 Create a written-down Collection Procedure; make it readily accessible to all concerned.
2 Empty WIP and send out fees (interim fees for longer jobs) as soon as work is completed.
3 Introduce 14-day trading terms (if you don’t have them already).
4 Don’t rely on statements. They don’t work as reminders. Send email/letter reminders instead. (click here for suggested wording.)
5 Classify every account into one into 1 of these 4 categories. Take the appropriate action:
– “The Untouchables” – cannot/should not be followed up.
– “For Special Consideration” – complicated, involved – time-consuming, do last.
– “Just Due for Payment” – not paid but only just overdue.
– “Long Overdue for Payment” – small balances but long overdue.
6 Have a “pay-by” date & the firm’s bank account and BSB details on all invoices.
7 Chase selected accounts weekly (ie: those that have not responded to standard reminders or where promises to pay have not been kept.
8 If you have several Partners, don’t waste time seeking permission to follow up clients with unpaid fees; switch the onus on them to advise “Accounts” which ones should not be chased. (If they don’t … out go the standard reminders!)