Reading time: 3 minutes

Making sure you get paid on time can be tough. There are few businesses that haven’t had to write off business debts! Occasionally your customers will just forget to make a payment; these customers usually are not a problem, as they will pay you as soon as you let them know you’re still waiting. At other times, however, you will come across customers who actively avoid paying you. This article will provide you with some strategies to encourage payment.

1.  Upfront Payment

The easiest way to ensure that you get paid on time is to require an upfront payment before you provide any goods or services. This is obviously not possible for everyone, but many online businesses operate on this basis, and it ensures not just a 100% payment record, but a positive cash flow cycle. There is no better way to ensure full payment!

2.  Use a Credit Card Facility

As part of demanding upfront payment, you will usually accept credit cards. It’s important to remember that it’s actually the credit card provider paying the relevant amount into your businesses’ bank account. The customer then owes a debt to the credit card company. If they default on that debt, it’s down to the credit card company, not you, to collect.

3.  Credit Checks

If you can’t insist on an upfront payment due to the nature of your business it can be prudent to perform a credit check on potential customers. This only makes sense, of course, if you are considering selling goods and services of substantial value to a customer; performing a credit check takes time and effort. Moneysmart, a government agency, provides information on how to look up a potential customer’s credit.

4.  Document your Agreement

If you have actually signed a clear contract with your potential customer, you will be in a much better position to collect overdue payments. A written contract focuses the mind. If it’s very clear that the customer has a binding obligation to make payment you will be in a much better position.

5.  Just Ask to get paid on time!

There’s not need to go straight to a lawyer if you’ve got an overdue debt that needs paying. Simply ask for the payment to be made. You will often find that a polite request will be met with payment.

6.  Go to the Professionals

If you still can’t get paid on time it may be time to start working with either a debt collection agency or a lawyer. If you do decide to work with a lawyer, LegalVision can help, so just get in touch!

Conclusion

Non-paying customers can be frustrating, but there are a number of steps you can take to reduce the risk of non-payment and get paid on time. Furthermore, there are steps you can take to make customers pay-up. For more legal advice on how to get paid, contact LegalVision on 1300 544 755 and speak with one of our lawyers today.

Webinars

Construction Contract Essentials

Thursday 12 August | 11:00 - 11:45am

Online
Understand how construction contracts are drafted and how to protect your construction business.
Register Now

Startup 101: Understanding Cap Tables and ESOPs

Thursday 19 August | 11:00 - 11:45am

Online
Cap tables and employee share option plans are essential for fast-growing startups. Learn more with this free webinar.
Register Now

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. From just $119 per week, get all your contracts sorted, trade marks registered and questions answered by experienced business lawyers.

Learn more about LVConnect

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • 2020 Excellence in Technology & Innovation – Finalist – Australasian Law Awards 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice – Winner – Australasian Lawyer 2020 Employer of Choice Winner – Australasian Lawyer
  • 2021 Fastest Growing Law Firm - Financial Times APAC 500 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year - Australasian Law Awards 2021 Law Firm of the Year - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer