Keep track of customers, take control of invoices – and get paid faster. Dun & Bradstreets’s expert reveals how it’s done. “Automated processes mean that there’s less risk of things falling between the cracks,” says Henrik Hargéus, Product Manager, Risk & Credit.
It’s no secret that many small business owners in Sweden are often affected by late payments or by not being paid at all. This causes liquidity problems – and in the worst-case scenario can make it difficult for your own business to function.
“This type of situation has a domino effect. If you don’t get paid by your customers, you end up in a position where you also fall behind with your creditors,” says Hargéus.
According to him, delays are due to not only the organization that should be paying but also the one getting paid. “Many good entrepreneurs are very talented at their ‘core business’ but neglect the administrative side, i.e. invoicing or making payments. This may be, for example, because the invoices are incorrect, perhaps some detail isn’t right. Then the invoice has to be resent and you have to wait even longer for your money.”
Quote block Henrik
“It’s constantly updated and shows the overall picture. Everything is gathered in one place, and you get access to decision-making support and continuous monitoring. The system covers several countries, so you can keep track of companies and consumers in other countries too,” he says.
1. Check out customers in advance
Dun & Bradstreet RiskGuardian Suite gives you a quick overview of new and existing customers’ payment behavior.
2. Make sure the information on the invoice is correct
This may seem obvious, but errors often slow things down. Dun & Bradstreet RiskGuardian Suite constantly updates, for example if a company has changed its name.
3. Have a credit policy
In short, create internal procedures for who is responsible for credit, how invoicing is to be handled and how to react in the event of delayed payment. Make sure that everyone concerned in the company is aware of the policy.
4. Set the right credit limit
Payment Index enables you to monitor the customer’s payment behavior and to set a reasonable credit limit on that basis, which reduces your risk of credit losses.
5. Charge a reminder fee
Make sure that the terms of payment are clear and show that late payment results in a reminder and an accompanying charge. Many companies avoid this for fear of falling out with customers, but late payment can put your own company in a tough position.
Share it with your network!
Help your friends to new knowledge