How to ensure you get paid on time

  • 09 Apr 2019

By Jonathan Amponsah, CEO, The Tax Guys

Late payment remains a challenge for the majority of small businesses. But there are steps you can take to ensure customers pay you more quickly.

You’ve done the work, spent time and effort pleasing the customer and probably incurred staff and material costs. You wait 30 days, then longer – and still no sign of the cash.

You’re frantically calling customers to get assurance that you will be paid. You do all of this so that you can meet those important bills, including payroll. It can be a stressful experience.


The Evening Standard recently reported that small businesses are collectively owed £16.9 billion. According to research by accounting software provider Xero, the average British small business is owed £24,841 in late payments on any given day. There are many ways to tackle this late payment epidemic.

This article looks at preventative measures and ways to get that cash into your bank account.

Review your contracts

A good contract makes it clear when you must be paid. Avoid offering long credit terms; in its document Creating a responsible payment culture – A call for evidence in tackling late payments, the Government notes that payment terms beyond 60 days are unacceptable. From a credit control point of view, make sure your contract has clauses in connection with late payment interest, recovery costs and liability to pay. 

Encourage early payment

You can offer customers at least three payment options. On your electronic invoices, consider including bank details, credit card and direct debit mandate links. There are some good online providers of direct debits.  


You can also offer incentives – such as a percentage discount if the bill is paid straight away, another discount if customers complete the direct debit mandate, and a full price if they pay in 30 days. Use technology to bill on time and send gentle reminders. With so many apps on the market, you can now let the robots do some of the initial reminders for you.

Take a deposit

It’s good practice to request half payment upfront and half on completion. Don’t work for a customer who hasn’t paid you the first deposit. If they query this practice, stand firm or walk away; if you find this is having an effect on sales, review your value proposition and target market. 

Review aged debtors

Review debtors regularly and phone customers who have not paid. According to debt recovery company Echo Managed Services, 40 per cent of debts get paid after a telephone reminder. 

You may prefer to remove yourself from the process – this removes any emotional connection. Taking this step is a good way to ensure that your business gets the cash it needs to stay afloat.

Debt recovery

Your credit control department can draft a series of strong debt collection letters and add interest in accordance with your contract. This department can also be your accountants if you outsource the whole finance function to them. Or you can get a solicitor to draft and send these out for you.  

Part of your debt recovery process should be a consideration to progress the matter through the Small Claims Court. Statutory demands are also powerful tools to help you get paid faster. Another useful recovery method is the procedure under the insolvency rules, although this can be expensive. Discuss these options with your legal advisers.


FSB members can access the FSB Debt Recovery service. For more information go to

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