A company should issue invoices on time and these should state the credit policy and payment terms. Outstanding payments should be chased promptly. It may also be worth offering a small discount for early payment. You need to keep on top of payments from your customers. If you don’t remind them they may just not bother to pay! Your financial software system will let you print out information about late invoice payments to enable a regular follow up. Usually a reminder letter or copy invoice is sufficient but a polite follow up phone call may be needed. It is not good practice to keep on supplying a company who has several outstanding invoices.
What can a business do about a good customer who is a late payer ?
A business should have a credit policy and standard payment terms. This is clearly sensible and good advice. But what should a small business do if a larger business totally ignores the stated term of say, 14 days ? This is a reality for many small businesses who are not in any position to insist with a company that can clearly take its business to other suppliers. If the company is a significant repeat customer it is appropriate to agree better terms for them (they may want 45 days for example) though this should only be done in extremis and if on-going cash flow will cope with it. It is also worth asking for staged payments or initial; deposits for really large orders. You should not under any circumstances risk the business by becoming overstretched.