Page 32 - RLI May 2019

RLI RETAIL INSIGHT

7½ ways to get

paid faster

THIS moNTH’S EdITIoN of THE RETAIL INSIGHT SEES RISHI
PATEL, CHIEf ExECuTIvE of THE CuRRENCy ACCouNT
TAkE A Look AT A NumbER of dIffERENT wAyS IN wHICH
ExPoRTERS CAN INCREASE THEIR CHANCES of GETTING
PAId, ANd wAyS To ENSuRE THIS HAPPENS oN SCHEduLE.

nyone who’s been in the export business knows So make invoicing a priority. Feedback from our own clients
cash-flow is more important than profit. A healthy suggests that invoices issued within a week of a job being done,
cash-flow shows you’re a well-run business get paid in five days.
A(attractive to potential customers, investors and
buyers). It means you can avoid taking on debt – always a good 4. Make paying you easy – that means giving your customers
thing. And with cash in the bank, you can invest in things like a choice of payment options. For example, the option of paying
better technology, R&D, employee training, and marketing. you via PayPal, credit and debit card, cheque, and bank transfer.
Any successful SME also knows that nothing has a more damaging And to make life even easier for them, invoice them in their local
impact on cash-flow than late payments. A fact supported by the currency. They won’t have the hassle of exchanging currency or
2016 Federation of Small Businesses’ (FSB) report that overdue the headache of fluctuating exchange rates, and will love you for it.
payments killed 50,000 UK businesses and cost the economy
£2.5bn. Astonishing figures, but unsurprising when you factor in the 5. Invest in a decent accounting system – the good news
ripple effect of one company stalling payment to another, who in is that today’s accounting software and invoicing packages are
turn stall payment to another… and so on. With late payments designed for business owners, not accountants. Most will help
presenting a major risk to SMEs in general, the risks for companies you to track time, invoices and statements along with a whole
doing business overseas only increases. lot of other features. But if you’re exporters, we’d strongly
recommend something like FreshBooks, Sage Business Cloud
FASTER INTERNATIONAL pAyERS = A bETTER Accounting or Kashoo, which you can integrate with a multi-
INTERNATIONAL bUSINESS currency invoicing system.
So what can exporters do to make sure they get paid faster?
Well, as a specialist currency provider with lots of experience in 6. Add overdue fees and interest – if you’re going to apply
international payments, here are our top 7½ ways to get paid faster: fees for late payments, make sure you include these in your
payment terms at the outset, or make them part of your contract
1. Do your research – before you jump into your next export negotiations. Check if the country you’re trading in has a statutory
contract, do some digging. The Department of International entitlement – like the UK – and whether importers qualify.
Trade is a good start. Its Exporting is Great website has lots
of useful resources such as exporting country guides, tools to 7. Audit your clients – focus your efforts on chronic late
check a country’s import procedures and documents and a list payers. If you’re always chasing them, it might make sense to
of approved brokers to protect you against non-payment. request full payment up-front in future. You may lose them as a
customer, but that might be better for your business (and sanity)
2. Set expectations – agree crystal clear payment terms in in the long run. Keep on top of overdue invoices and you’ll keep
writing from the very beginning. If customers know exactly what the pressure on late payers. Of course, if a customer is habitually
your payment terms are up-front, there’s really no excuse for late there may come a time to sack them.
them paying late. Make this part of your negotiations and write
it into the contract (including any late fees, for example). We 7½. Invest in the relationship – why only a half? Well, its
recommend you keep payment terms as short as possible. No. 8 really. If you invest in getting to know your customers
when there isn’t an issue, you’ll find it’s easier to raise and solve
3. Get your invoices in quickly – the earlier you get your one when there is. E.g. it could mean sending a friendly email
invoice in for work complete (or a reminder that an invoice is reminder or tweaking your invoicing dates so it fits in better
overdue), the sooner you’ll get paid. It’s obvious isn’t it, but so with their payment run, or a quick call to say thanks for a swift
many companies don’t – perhaps it’s a ‘British politeness’ thing? payment. And always, always, always be polite and professional.

32 RETAIL & LEISURE INTERNATIONAL mAy 2019