Cash Flow – Getting paid quickly from a large company or local government
Typically local government and large corporate companies suffer from bureaucratic delays on payment.
Part of the process for on boarding a new customer should be to establish your customers process for authorisation and payment.
- Does your invoice need to contain specific information required for your customer to easily identify and authorise? Such as delivery address, site name, department etc.
- Does the invoice need to be addressed to a different address that the person ordering your goods/ service
- Do you need to send copies of the invoice to multiple people? E.g. finance and buyer?
- Do you need a purchase order number?
- Is a separate purchase order required for each invoice or is it for a whole order covering multiple invoices?
- Will the purchase order expire on value or time?
- Make sure you keep on top of your customers process. For example if a Purchase Order is to a maximum value, keep track of invoices against that PO and inform your customer when you hit a value of, say 80% so your customer can get the next PO authorised and ready.
Then agree to call the person responsible for each step to check authorisation has happened, basically “walking” your invoice around the different departments. Also find out how to escalate if your invoice is not being processed by a specific team quickly. All this should be timetabled before the invoice is due for payment to ensure you get paid on time.
The first invoice to a new customer should be followed up the following day as this is when you will discover if you haven’t been given the correct details for invoicing purposes and you will have time to correct any issues to still get paid on time.
From our experience, once you have followed the above guidelines, you will build better relationships with your customers and they pay more quickly with less effort from you.
All credit Control should be proactive, but it is worthwhile identifying customers where you need to go the extra mile at the outset.
Please contact us to see if we can help 03332 413 203.
