Small businesses can recover cash faster by offering early-payment discounts, like 5% off if customers pay within seven days. Personal follow-up with clients also helps secure payment. Large companies are legally required to honor these discounts.
If you are dealing with bigger companies like PLC companies, if you offer a discount, by law they have to honour that and pay those invoices before the other ones. So because they have to look after the shareholders. So late payments is a big challenge for most small businesses. I think the statistics are quite crazy in terms of how long small businesses have to wait for payments. And I think a lot of businesses failed it. From the fact of understanding invoices, one of the things I've worked on in Ronald James has been we offer a 5% discount off the invoice paid within seven days. So that's really helped with a lot of receivables that are over 30 days due. So one of the tips I would give is offer a little bit of discount because you can get that money in quicker. Yes, the ideal scenario is everyone pays on time, but that doesn't happen in the real world. So when you learn to adapt, have a different strategy. So like I said, on our invoices we offer a 5% deduction. It paid within seven days and that gets the money in faster. But I think there is a. There's a lot of concerns at the moment for late payment and clients, but being personable. So a lot of the time I would just ring them up, whether it's the business owner itself or the director and say, look, can you help us out? We're a boutique agency, we wouldn't run fine margins. Are you okay to sort the invoice out? And 8 to 9 times out of 10 that should be the case, but that's one of the tips that I would give is offering a slight discount for early payment. Another tip that I learned from that as well. If you are dealing with bigger companies like PLC companies, if you offer a discount bylaw, they have to honour that and pay those invoices before the other ones. So because they have to look after the shareholders. So when you offer a PLC companies say 5% off the invoice, if they pay early, they should by law have to accept that payment early. So that's another way to get paid quicker by PLC companies is in writing, offer a discount because they should be obliged to use that and accept that. So that's my top tips on how to deal with latent payments for a small business. If you like this video, can you please subscribe and like the channel? Because we're trying to grow that and get to a bigger audience. And if you have got any comments or questions, pop them in below and we're going to start doing a YouTube Q&A so if you've got any questions about business or recruitment, drop them in and I will try and answer them on next session. Thank you. Hi, thanks for watching today's video. If you like what you've seen, please like and subscribe button with Entrepreneur Gems so you keep up to date with all of the updated videos. If you've got any questions or comment, I'd love to hear from you. So please drop a comment in Entrepreneur James below and we'll look to answer those on a weekly Q and A video. Keep an eye out for any future videos that we'll be posting. I'll be popping the video in here probably every one to two days. Thank you.
