One of the things that create a lot of anxiety for business owners is not getting paid by their customers, or being paid late. Particularly if they have their own employees / subcontractors to pay.
It can leave the owner in the nightmare situation of paying for work to be done for others out of their own pocket, and late payments can create havoc with cashflow.
Sadly, there has been many great businesses that have gone under as a result of one large customer not paying their invoice.
Here are my tips for getting paid and getting paid on time:
Run a credit check report on all customers that could have a significant impact on your business if they fail to pay you, or fail to pay you on time. You can ask your accountant to do this for you. Whilst you're there, also ask your accountant to check them out on Companies House. Accountants are trained to smell a rat in a companies house listing. You can also buy software that will run credit checks for you, and alerts you of any changes to their credit rating. Make sure you alert your client at the time of contract / terms signing that you will run an electronic credit check.
Take a deposit - even the smallest of deposits can make sure a customer is serious about the work taking place.
Be really clear about the payment schedule before you start work.
Consider using GoCardless that allows you to request the funds directly from your customers bank account. You can set up a payment schedule in the software for future automated payments.
Send out your invoicing promptly. Tardy invoicing = tardy payments. Creating invoices can be easily automated through your accounting software, if you use a modern system like Xero or FreeAgent.
Use a system to automatically follow up unpaid invoices. Again you can use your cloud accounting software to do this for you.
One final point is to monitor your cash flow forecast ahead for the next couple of months, there are really easy to use softwares that can do this for you.
The sooner you know about a cash flow deficit in the near future, the more support you will be able to received and the better rate you will get on a financing / funding arrangement.