Chasing late payments is a necessary evils for all printers. For many small businesses, it can be the difference between survival and collapse. And it’s getting worse. According to the latest Dun & Bradstreet trade payment analysis, the number of bills left unpaid for 90 days or more grew 20% compared with 12 months ago. At about 52.3 days, the average trade payment term is now running almost a month beyond the standard 30-day payment period. 

It’s a problem for any printer. After all, printers are not banks. They can’t offer extensive terms, as credit card companies do, because they have their own bills to pay and a late payment makes it more likely that they will become late payers themselves. And the problem is that if they let clients get away with late payments, they are more likely to keep paying late.

So what is the best way of handling it? The first thing to do is to consider your payment terms. What works best for your cashflow? 30 days? 14? Seven? Would you consider payment up front? Each business would have different needs, depending on their market, their size and their clientele.

The next step is to make sure the invoice is sent as soon as the job is done. It is best not to leave it. Sending it immediately is better for cashflow.

Some companies ask clients to sign an agreement right from the start outlining details like pricing, inclusions, exclusions, privacy, limitations of liability, and any other relevant issues. That makes the business relationship clear from the very beginning, and ensures clients know exactly what the payment terms are. Customers need to understand terms and conditions.

Danger signals to watch out for might include slow payments, broken promises of payment, post-dated cheques, unreturned messages and unauthorised return of goods.

If clients haven’t paid their invoice, you can politely inform them that you can’t provide them with any further services until it is paid.

Calling in a debt collector after three reminders via email, post or text messages of late payment is one option. The problem there is that it escalates the issue. It leaves a bad taste in everyone’s mouth and you will lose the client. Calling in a debt collector should only be the last option when all other avenues have been exhausted.

A better option might be to call them and ask if they are happy with the product, if there is anything else they need, and then casually let drop that their last bill is unpaid and it’s due to be paid. Call their accounts payable department to check whether the invoice has been received and whether it has been approved for payment. It is important to keep the conversation friendly, civilised and even humorous.

If they still don’t pay, don’t do business with them anymore. But through all this, it is important to push through to a resolution. If printers have to call in the heavies with repossession, legal action and debt collection, they still need to keep their client informed of all the steps they will be taking.

It is a difficult process but one that everyone has to manage. Cash collection is a business critical activity.

Leon Gettler is a senior business journalist who writes for a range of leading newspapers and journals

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