How To Get Paid On Time

Late payments continue to be a massive issue for small UK businesses, but there are steps you can take to get paid on time.

Review your existing customers

While many business owners understand the importance of credit checking new customers, they may be unaware of trouble brewing with existing customers.

When did you last do a customer review?

Are you monitoring accounts regularly?

Credit limits shouldn’t be set in stone and you need to be consistently re-evaluating your customers’ creditworthiness and monitoring their financial health for as long as you continue doing business with them.

Photo credit: John Schnobrich on Unsplash

Look for trends

Are you looking out for any trends that result consistently in late payment – such as persistent querying of invoices and deliveries, and an increase in the number of overdue items and the number of days overdue, for example?

Set appropriate credit limits

A good rule of thumb is to limit the credit offered to 10% of the customer’s net worth. The formula for calculating net worth is:

Net Worth= (customer’s total assets-total liabilities) / 10

Alternatively, you could set the limit at 10% of the customer’s working capital or average monthly sales.

In same cases it may be appropriate to refuse credit or insist on part payment upfront. For example, you could offer standard credit terms while invoicing for a percentage of the sale price on order, and invoicing again on completion for the remaining sum outstanding.

Strike the right balance

On the one hand, you need to encourage revenue growth by lending to the right customers who are able and willing to pay you on time.

On the other hand, you need to reduce your risk of lending to the wrong customers who make a habit of paying late or defaulting.

My bookkeeping service helps you get this critical balancing act right.

And the benefits are:

  • You get paid on time
  • You improve your cash flow.
  • You protect your own credit rating by offering trading terms and credit limits that are appropriate for your customer base.

Need a little help?

My Accounting Emails are for business owners who want a better understanding of their financial position. They’ll help you manage your cash flow and stay in the black.


Need more help?

Contact me today and we’ll talk about the help you need.


“As a small business it is important to always have financial clarity and often it is difficult to try and do this yourself. Paul has worked with us for several years and has streamlined and organised all of our accounting systems. He provides us with a complete accountancy service and is very professional in his approach as well as being a likeable guy.” - D. Walsh, Director. DualTEC Services Limited, Keighley.
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