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Late payment is unfortunately one of the major bugs that businesses of all sizes have to bear -- a culture of late payment seems to run through Maltese business and it is an almost 'accepted' practice to delay paying invoices in order to manage cash resources.
There are, however, a number of other measures you can use to encourage prompt payment.
Make sure you employ an effective and efficient credit controller to monitor payment and chase up tardy customers. If your clients deal with the same, named individual on a regular basis they are more likely to respond than if they receive calls from a stranger.
Make sure you have effective terms of trade, which give the company retention of title until full payment has been received.
When dealing with new customers, always undertake a credit investigation to ensure you are not dealing with a bad payer. Establish a pattern of prompt payment from the very first invoice. If the debt becomes overdue, make sure the customer is contacted immediately and alerted to the importance of paying on time. Customers get into 'payment habits' and once a late routine has been established it will be very difficult to break.
Don't issue threats - such as court action or suspension of services -- and then fail to follow them up -- false threats rarely achieve payment.
Keep a close eye on existing customers, especially if trading patterns suddenly change - it could be an indication that the business is hitting financial problems in which case you will need to take action to reduce your company's exposure.
Remain in control of the payment situation at all times. After all, a sale isn't a sale until it has been paid for.
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