I’ve delivered a great experience but then I’m not getting paid, what’s wrong?
For any business this is a confusing situation and one that has many reasons. Here I’m going to look at the most common causes of not receiving payment, even though you exceeded expectations on your project.
1 – Did you invoice correctly?
Before you start any project with a new customer, you need to check who you are actually invoicing. You might think you are deal A J Smith but is that the actual legal entity, or is the legal entity, AJ Smith Ltd?
If you don’t invoice the correct entity it may be that they won’t pay the bill. Check out your prospective customer at https://beta.companieshouse.gov.uk/help/welcome make sure the person you are talking to is a director and if they aren’t get them to confirm in writing they have authority to act on behalf of the company.
2 – Can they afford to pay?
For free there are many sites which provide an overview of a companies financial position. They won’t generally give you a credit rating, however they will give you guidance as to whether the company can afford your services.
3 – Has the correct person received the invoice?
Your contact may have been the right person for your project, but this doesn’t mean they are the person who actually pays the bills.
When you are talking to your customer, ask them who will need a copy of the invoice in order to make payment? Find out about their payment process, who needs to approve the invoices and is there a way you can assist their system?
I’ve helped my clients work with their customers and it has achieved fabulous results.
Sam Pratt, Production manger at Captive North, said “We are a small video production company where cash flow is key to the running of our business. We have a few large companies as clients and getting payment on time can be tricky due to their complex systems.
But with Rachael’s advice we were able to build relationships with these clients that enabled us to be paid ontime, every time. This has enabled us to take on more work and thus grow the company.”
4 – Do they believe you gave them exceptional service?
Is there still a teething problem? Something so small they didn’t want ot bother you with it but isn’t actually quite right for them? Ask them the question find out what it is that is delaying the payment and resolve it.
5 – Is it your methods of chasing payment that is causing the delay?
We are terribly British in our approach to money. We don’t like asking for money at any time, especially not once it’s overdue yet most companies delay any conversation about invoices until they are already late.
By calling before an invoice is due, you can build your relationship with your clients, make sure they have received the invoice and there are no problems on it.
Sue Lister, owner of Tresil Web services writes “Big thanks for your August 2014 Credit Control Workshop last Friday, Rachael. Thanks to your informative, interactive and thought-provoking workshop I’ve learnt that credit control is a new type of customer service. And it makes perfect sense. Every communication with our customers is part of the service they receive from us and getting paid is no exception.
I highly recommend your credit control best practice Rachael and recommend anyone who is looking for new ways to communicate with their customers about getting paid sooner. “
Hopefully this blog has helped you understand why even though you have provided an excellent service you still aren’t being paid as well as some ways to deal with the issues.
Now it’s your turn, let me know what other reasons you’ve had for non payment of an invoice and I’ll address, either anonymously or answering you directly if you would prefer.