Getting Paid on Time
Do you struggle to get all your customers to pay you in full and on time? Are you wanting to improve the cash flow and financial health of your business? If so, then this is the video for you.
Our Director, Alex Martin, shares his top 5 tips to getting paid on time.
If you would like to discuss a specific issue of concern in your business, please contact one of our experienced commercial lawyers at Taurus Legal Management on (03) 9481 2000 or at info@tauruslawyers.com.au.
Transcription:
Hi everyone. Today, I’m going to give you my top five tips to get paid in full and on time.
Hi, I’m Alex Martin. I’m a commercial litigation specialist and these are my No Bull Legal Tips for Business Owners.
Okay, so let’s get into it. Tip number one, this is the most obvious one, and also the most powerful, and that is get paid upfront. If you can get paid in full upfront then you’ll never be chasing any debts again. Now it might be that you can’t get all of your clients or customers to pay you upfront, but you might be able to get some of them to pay upfront, or pay some deposit, or pay for materials before you start the job. Whatever it is, if you can get some portion paid upfront then it will make a big difference to your cashflow.
Tip number two, make sure you bill or invoice early and often. So if you’ve finished a job on the second of the month don’t wait till the end of the month, invoice it on the second of the month. It’ll start your debt recovery cycle earlier, and customers are more likely to pay right after you’ve finished the work, or delivered the goods. That’s normally when they’re most happy, and most likely to pay you in full and on time.
Tip number three, have a follow-up system, so that’s not just ring debtors when you get around to it, or when there’s a particular one that you’re having trouble with, but have a system so that you follow up every customer that you have on the day say that their invoice is overdue, or a week from their invoice becoming overdue, and then perhaps send an email as the first step, and then a call as the second step and so on. Have a set system that everyone goes through and that is as regular as clockwork. Don’t just leave it to chance.
Tip number four, is make sure you examine the real reason for non-payment, so if you’ve gone through tip number one, two, and three and you still don’t have payment then look at that particular customer and say why haven’t they paid. There’s only two real reasons that people don’t pay. One is they’re not happy with the goods and services, and the other is that they don’t have the money. So, if there’s a real reason for non-payment then address that, and if they don’t have the money then we’ve got to look at payment plan or some other arrangement.
And tip number five, if you’ve gone through tip one, two, three, and four and you’re still not paid is take legal action. So, if it’s a small debt you can do that yourself. You don’t need a lawyer necessarily. You can go off to the VCAT, the Victorian Civil and Administrative Tribunal – effectively just filling a form and pay a very small filing fee and run the case yourself. If it’s a bigger debt I’d recommend that you go to the Magistrates’ Court or a very large debt to the County Court or the Supreme Court. You will need a lawyer to do that, but in most cases a lawyer will send a demand first and 25, 30% of demands result in payment, and then if they can’t get paid they’ll issue a proceeding, and a lot of cases settle when a proceeding is issued as well, and then if that doesn’t work that it’ll go to a mediation and, again, a lot of cases settle at a mediation.
All right. That’s my five top tips.
Thanks for listening, and if you’ve got any questions please message me directly.