You must always ensure that your customer is aware of your terms of business or sale before they do business with you. Including your terms of business on the back of your invoice is a good way of re-enforcing your terms. However, it cannot be your only method of highlighting your terms and conditions.

There must be proof that the customer to whom you supplied your goods or service placed an order with you such as a signed order, or a purchase order form.  An e-mail or letter from the customer to you or from you to the customer is just as good. The important thing is you must be able to demonstrate that an order has been placed.

Always ensure that the details on your invoices are accurate, since inaccuracies will damage your credibility and will be used by the customer as an excuse for delaying payment.

Make sure that you

• Address the invoice correctly (to include a full post code)
• Find out where the invoices should be sent and for whose attention
• You include a reference to the buyer of the goods or service
• Quote any reference or purchase order number you have been given

Send invoices as soon as possible – not only is this necessary to establish the correct date for VAT purposes, but it also starts the credit-period clock ticking.

If you are to stand a chance of being paid on time, you must contact your customer at least 2 weeks before payment is due to verify that:

• The invoice has been received and is correct:
• There are no queries or issues
• Payment will be made on time

If there are any queries or issues, or the customer needs a copy of the invoice it then buys you time to deal with this before payment is due rather than after. In other words, being pro-active means there is still a good chance you will be paid on time.

You must have a consistent approach to credit control. There must be a credit control process or policy in place for your business. You need a good accounts package in order to manage and maintain your sales ledger and keep track of who owes you money and for how long. We recommend Sage Line 50 above any other accounts package. Furthermore, if you outsource your credit control to a service like CCS who will take full control on your behalf.

We use key performance indicators to assess our own performance. One of the simplest KPI’s is to look at the percentage of debtors who have owed you money for more than 90 days. If your payment terms are 30 days (or less) there should be no more than 10% of your ledger by value owed to you beyond 90 days. We would suggest that you review percentage of debtors over 90 days at the end of each month.

It is often helpful to bring the problem of the unpaid debt to the attention of the buyer of your goods or your service, and suggest to them that you cannot guarantee future service/goods until the account is settled.