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Keywords: late payments, electronic invoicing, einvoicing, e-invoicing, AuroRek, getting paid on time, Institute of Credit Management
Susie West | News | 14 August 2012
Much has been made of the impact of late payment on small suppliers in recent years and it's easy to assume that large, uncaring buyers are solely responsible.
In some cases this may be true, but buyer 'naughtiness' is not always to blame, as Jim Muir, a qualified accountant and Director of financial controls software provider AuroRek, points out.
During a live Q&A session with readers of the Guardian newspaper, he said there are many aspects to getting paid on time, some of which are within the supplier's control.
For example, the quality of the invoices being sent is one consideration. Invoices should contain all the necessary information, presented in a consistent and concise way.
Delivery of invoices in another, as "sloppy" delivery can lead to invoices being lost or misplaced.
Electronic invoicing can help in both of these instances, improving the quality of invoice data and ensuring that the documents are delivered instantly to the right people.
Another way for suppliers to tackle late payment is to keep the lines of communication with buyers open, Mr Muir notes.
"I can't believe the number of businesses that have stopped sending statements of account and other low cost 'pokes; and end up with poor communication lines to their customers," he stated.
"An early settlement discount is usually enough of an incentive for some of them to play ball; good for the invoicer too as it reduces the VAT."
Philip King, Chief Executive of the Institute of Credit Management, also took part in the Q&A session and agreed that suppliers could do more to ensure payment on time.
He said invoices should be raised "immediately" and payment terms set as part of the negotiation at the outset of the trading relationship.
"Of course some businesses will delay payment but if you get the front end right, the chasing process is far more effective and you can be far more confident," he remarked.
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