When I was running my company there were times when money was very tight and we wrote cheques right up to our overdraft limit.

 

But we always had two rules that we followed. Firstly we would never write a cheque if we knew we couldn’t honour it. And secondly, when people rang to chase their money we would always tell them when they could expect to receive it and then we would keep our promise and pay as agreed.

 

What always used to amaze me was how so many people were so unprofessional in collecting their money from us. They did not confirm we had received their invoices, they did not send statements and they completely ignored the whole process of getting their money in.

 

There are always many reasons why any company might pay their bills late and there are times when, no matter how many assets a company may have, even the best organisations become late payers.   Reasons for this may include a shortfall in sales or in their receiving expected income, unexpected or large purchases, unplanned outgoing payments, their own failure to collect money due to them, and of course human error. A friend was telling me last week of how a company she worked in partnership with once overpaid her throughout a twelve month period by mistake.   There was no way that she could have known they were making such a mistake. They finally realised and demanded their money back and even though they gave her a year in which to pay it, it still put a tremendous strain on her cash flow.

 

And there is always the possibility that people don’t pay you because they can’t. Even the best-run businesses can go to the wall overnight without anyone realising what is happening. If one of their major customers decides not to deal with them anymore or one of their customers doesn’t pay them, they too can get into distress very fast.

 

Meanwhile you have to find money to pay your staff, your overheads and all your creditors.   And if you are a freelance you will probably need the money for your rent or your mortgage.

 

Getting your money in requires tenacity, persistence and an ability to be pleasant to those people who make the decisions as to who is to be paid. Some people have no problem phoning and asking for money but if they are rude, they may offend the people who control the purse strings. So persistent sweetness and light is usually the best approach and only resort to anger if all else has clearly failed. Most people making payment decisions are not paying over their own money so there is usually some flexibility in the system.

 

The people we paid first were always those who chased the hardest.   Firstly, we respected that they were doing a professional job and secondly, we wanted to get them out of the way. After that we would pay all the people who did not bother to chase us.

 

The important message here, for all those who hate chasing money, is that it is the most important thing you can do both for yourself and your organisation. You are entitled to receive payment for monies you are due and you should never feel embarrassed or ashamed to ask for it. If you come from a family where money was never discussed or talked about, it can be particularly hard to ring and ask for money. But you have to get over this – and fast.   We are entering into a time of recession when it will be become much much harder to get your money in. Make a resolution never to procrastinate and never to relax your vigilance in getting paid what is rightfully yours.

 

Judy Piatkus