Most small business owners hate chasing customers for payment. (The only exception I know is a client who used to send witty poems to late payers) This means that it gets left until the last minute when payment is long overdue.
To be honest, this is one of the main reasons that I like to have clients on monthly payments settled by direct debit. Yes, it improves cashflow (and spreads the cost for our clients) but it also means that I only have to have positive conversations with clients.
But you can build your payment collection into your customer service.
When dealing with a new client or a particularly large project you can pick up the phone and call them before sending the first invoice to check that everything is all right. If there are any outstanding issues these can be dealt with immediately thanks to this proactive approach. You can also check up on any purchase order numbers and contacts needed for the payment process.
Once the invoice is raised it is worth checking with their payment department that they have everything they need, all authorisations have been completed at their end, and when they make their payments. There is nothing more annoying than missing their payment run by a day. (Okay, maybe it’s more frustrating trying to get papers from certain clients in order to complete their tax returns in plenty of time but it’s still not great) Whilst small organizations will pay around the director’s availability to make payments larger businesses will be tied to a monthly pay run.
If you know their regular payment date you will know when to start chasing as your invoice may have been missed off the list so you need to ensure that it is expedited. I once had a client pay the wrong company and they wouldn’t have noticed if I hadn’t (politely) chased them.
If it still isn’t paid and you have completed your part of the contract (which was confirmed during your courtesy call above) then move to 7 day notice of legal action sooner rather than later. And don’t forget to add debt collection costs and statutory interest to the bill. Even if your customer is unable to pay the full bill they should be able to pay something on account.