Every business needs a good cash flow – that’s money coming in so you can pay salaries, bills and invoices. When market conditions tighten, the old adage that cash is king is never more true (despite it likely to be bank transfers these days) – money is better in your account than in sitting in your debtors accounts. The Hour Hands bookkeeping team supports many UK SMEs with credit control and has a strong understanding of how to get paid faster. Here’s their practical advice for a UK SME on how to get paid reliably and on time.

Ensure your invoices are right

Mistakes on an invoice could be your customer’s excuse not to pay so we recommend making sure that the description of the goods or services provided and the amount due is accurate, with the amount of VAT clearly shown if you’re VAT registered.

Remember to include your business name, address, and contact details, the customer’s details, a unique invoice number, and the date of issue on the invoice, along with payment terms and your bank details.

Also, make sure your invoice is sent to the right person. This could be accounts payable rather than the person you deal with day-to-day.

Set clear payment terms upfront

An important piece of advice that’s often overlooked – agree payment terms before you start work. Standard UK terms are 30 days, but there’s no reason you can’t negotiate 14 days or even payment on delivery for smaller jobs. One of our freelancers always asks for 50% up front, especially for a new client.

Make sure that you put your agreement in writing either in a contract, a purchase order confirmation, or as a minimum, in an email.

Did you know? Under the Late Payment of Commercial Debts Act 1998, you’re legally entitled to charge statutory interest (8% above the Bank of England base rate) on overdue B2B invoices, plus fixed compensation of £40–£100 depending on the size of the invoice. You don’t have to do this but knowing it exists strengthens your position.

Send those invoices out promptly

Send your invoice the moment work is completed and ideally the same day. Every day you delay invoicing is a day you’re extending free credit. If you’re working on a longer project, consider agreeing to invoice on reaching specified milestones. You could request a deposit upfront – it’s common to ask for 30–50% at the start of a project.

Credit control for overdue invoices

Chase early and create a credit control process

Don’t wait until an invoice is weeks overdue to make contact. A simple, friendly reminder a few days before the due date is professional and often expected.

Most accounting software like Xero or QuickBooks has built-in, automated tools for chasing payment but if you don’t use these tools, you may wish to build your own process. We recommend sending a polite reminder when payment is due, a firmer follow-up seven days after the due date, a formal notice at 14 days, and an escalation after 21 days.

Pick up the phone

Talking to your clients is so important and whilst it can feel awkward, it’s important as emails are easy to ignore. A quick, professional phone call is often the most effective way to unblock a stuck payment. It also tells you quickly whether there’s a genuine dispute or whether the customer is simply slow to pay.

Make it easy to for your clients to pay you

B2B clients will usually pay via bank transfer. Ensure that your bank details are displayed prominently on your invoices or offer a quick link to pay, often available through cloud-based software.

For B2C customers, it’s a good idea to offer multiple payment methods. You could consider bank transfer, card payments via services such as Stripe or SumUp, and direct debit for repeat customers. Direct debit is particularly useful if you bill some customers regularly as you control the timing of payments.

Deal with disputes quickly

A disputed invoice is often used as cover for wanting to delay payment. Have a clear process for resolving disputes. We’ve found that if part of an invoice is in dispute, you can separate the disputed portion from the undisputed amount and ask for payment of the part they’re not contesting. This gives you time to sort out the rest.

Know what to do if you need to escalate

It is possible that at some point during the lifespan of your business that you’ll have to deal with an unpaid debt so it’s good to be aware of your options.

If a debt remains unpaid, you could send a Letter Before Action. This is a formal warning that you’ll pursue legal action. If this does not work, you can make a County Court Claim – this is fairly straightforward for debts under £10,000 via the small claims court. Alternatively, you can employ a debt collection agency to chase your money for you.

If a client consistently pays late, it may be worth considering whether it’s good business sense to retain them as a client.

How can Hour Hands help?

We know it can be difficult to ask clients to pay, but when getting that money into your account is the single most important action that a SME can take to improve cash flow, it makes sense to invoice faster and chase outstanding debts earlier. This is where we can help. Not only can we ensure that your invoices are created and sent out to the right people, we can help you reconcile payments to the correct account and chase outstanding balances. The Hour Hands team is professional and friendly and is skilled in the art of credit control. Want to keep this work in house? We can help you set up a simple process for your team or software to run automatic credit control and reconciliations.

It’s very straightforward to outsource tasks to Hour Hands. Our team of professionals will listen to what you want to achieve and why, before suggesting a package or a one-off activity. This is a personal service delivered by a dedicated team that is keen to build a strong relationship with you and your team.

To get started, you can either email us on hello@hourhands.co.uk or call 01727 818262 or even complete the form on our website. Why not contact us today? It will lead to a no obligations conversation, and it will definitely lead to you discovering additional time and energy.

Let’s speak soon.