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Quality clients are made, not born

Credit control is a hot topic around the small business community because it seems that everyone is struggling with late payers.

Kaleidoscope has never had a problem with not being paid for my work – in fact my clients have never even queried a single invoice.

I could have been be tempted to say “touch wood” there – but it’s about much more than luck. Making sure I’m paid in full, on time, is as much my responsibility as my clients’, and I have a lead role to play in making sure that my cashflow remains healthy.

I’ve only had two unpaid invoices in the four years I’ve been running Kaleidoscope. The first was for a whopping £50, sent to my first and only client. He could afford it – he had his own helicopter – but it was such a small amount, he didn’t see the significance.

However, he was our only client, and it was my £50, not his, so I had to chase him hard for that payment. When it was finally settled, I asked for my next payment in advance – and he refused, so that was the end of that. When it comes to client-supplier relationships, trust goes both ways.

This demonstrates the importance of good communication, because the value you and your client place on a particular payment could be quite different, depending on your circumstances at that time.

The second occasion was when a client was prosecuted for fraud! Funnily enough, this client had always paid me on time – until he went to prison, that is.

So, with those lessons learned, here are my top tips for ensuring good cashflow, prompt payments and quality clients.

  1. Never stop working on your relationship with your clients. I know my clients very well now, so I know if a payment is late, they’ve probably simply forgotten, and it just requires a polite reminder.
  2. Keep in touch – if you’re gently, politely nudging your client about their remittance, they’re likely to pay you first.
  3. Provide crystal clear invoices – the reason I have never had a query on my invoices is because I include a full time report with every invoice, so it’s completely clear what I’m charging for. Averting the need
  4. Invoice regularly – smaller, more frequent invoices are easy to understand, your client is more likely to remember what the bill is actually for, and they will be smaller therefore easier to face paying.

If you’ve got anything to add on the links between good client relationships and smooth cashflow, do let us know. Please leave a comment in the box below.