14th May 2007 - We're making money...or are we?

To the outsider quite often business looks like a simple affair, sell lots, get rich.  Unfortunately, this is so often not the case, to the detriment of many new businesses who do really well with the first bit, but struggle with the second.  You can sell all you like, but if you can't collect it, it's game over.

It's not realy so much pf a problem if you know what to expect and put things in place to deal with it.  Where businesses go wrong, and in particular new ones, is they aren't ready for people either paying late, or threatening not to pay at all.

Let's make one thing clear here, there are  a lot of sharp dealers out, dodgey characters who'll try alsorts to get out of paying....but very few of them who will actually want to stare at you out of the dock of 'your' local magistrates court.

For me, getting paid has a number of key ingredients

1)  Having solid paperwork to prove that somebody has bought something ie. contracts, agreements t & cs

2)  Having a clear process to follow once payment dealines are missed

3)  Having every intention of following your process through to a court appearance if they proceed not to pay.

Once you have 1) sorted, unless they're going bust you should get your money.  3) will cost around £30 to bring about a court summons, but as I've said, few want to attend court, especially if they're likely to loose.

Where people go wrong is not following the process, being put off following through to 3) because threatening it seems rude?  well so is not paying....if somebody has bought from you and now doesn't want to pay, by all means give them a  week to cough up....but beyond this, send a summons.  We have a 2 letter process, letter one is a polite one saying there payment is late, pay up.  Letter 2 points out that they've ignored letter 1) and gives 7 days to avoid a summons.  Additionally, for larger payments we do have an interest clause in our Ts & Cs...quite often we send out a bill for interest and this can prompt a response.

A guess the anology is children....they will always keep pushing the boundaries as long as they're unsure you will not carry the threat through...on the contrary, if they are certain you will carry it through, you'll never have a problem in the first place.

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