If you are a small business owner you may have heard a lot of stories from friends and family about how long it takes to get paid. After sending emails and making calls you still don’t have your money. All this time and effort requires an extra member of staff and you need to think about the value of this “chasing money”.

If a client is a good client, they will want to ensure that you are paid correctly and on time but if they don’t particularly care that you are paid quickly you want to make sure that you have good credit management procedure and terms of trade. This is even more important for virtual assistant’s and those operating a micro business that is based around earning an hourly rate for services.

Short Term Funding and Payment Providers

If you find you need some extra help getting paid you can use services like PaySmart and EziDebit to ensure that your monthly invoices are paid on time and without your customer having to worry about it.

Another payment provider is DebitSuccess and these services enable you to receive regular payments automatically and even participate in the buy now, pay later market made popular by AfterPay and ZipPay.

The Career Academy Job seeker training program is included for free with Xero & MYOB training courses which use DebitSuccess to offer these popular online short courses for just $25 per week.

These services make direct debiting easy. You could set something like this up with your bank, but these companies make the job quicker and easier.

Who takes the credit risk?

You could even look at a prepayment system to ensure that you don’t need to spend time and energy on chasing up debtors. Some tradies will ask for any products to be paid upfront and also ask for an initial deposit which covers the first day of work.

This is particularly important if you have a new customer that is very late with their accounts and does not have a proper way of keeping their records. You might find out later that they don’t have a lot of money and may not be able to afford your services. Remember that if you supply products and services and then give your customers time to pay you are effectively offering them credit and that exposes you to “credit risk” – the risk that you will not be paid.

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