It’s sad, but it’s true – national data shows late payments are often the number one problem facing small businesses and family enterprises in Australia.
Whether you’re a small business, sole trader or tradie – we all know that late payments aren’t just an inconvenience. The delayed processing of invoices minimises cash flow, hinders business growth – and if we’re honest, can often make the difference between fulfilling a mortgage payment or providing food on the table for our families week-to-week.
One of the most important things to realise, if you’re one of the many small businesses struggling with late payments, is that you’re not alone. Each year hundreds of millions of dollars of bad debt gets written off by small businesses, tradies, and sole-traders in Australia. And it has to stop.
Together, we can do something about it. I’ve put together my top four tips to help your company collect those outstanding debts – giving you the freedom to focus on what you do best in business, for our community.
1. Check your contracts
Take the time to review your contracts and agreements, focusing on the terms and conditions originally set out for payment. Your contract should include options for debt recovery. It’s important to review what was agreed, and where you now stand.
2. Send a reminder
Personally reaching out to remind a company about an overdue invoice is a necessary first step. There may be a whole range of reasons for a late payment – showing a business that it hasn’t been forgotten, and how important it is for you personally, can help move the process along.
3. Know your rights
There are laws in Australia for debt protection to assist small businesses and sole traders. Stay up-to-date with current legislation and know your rights in case you need to use them.
4. Reach out for help
Sometimes, seeking additional help from an agency to collect overdue payments is necessary. Do your research – I have worked with struggling union members and tradies throughout my career – and one of the biggest complaints was that none of the larger collection agencies would assist small businesses, or they would ask for an unreasonable percentage of the debt collected. Seek the services of a debt collection agency specialising in small business.
Unpaid invoices cost small businesses more than just money. Time, business growth, jobs and mental health can all be significantly affected. Do yourself a favour and don’t wait another day – take action to collect your unpaid invoices now, and get back on the road to business health.
James Stewart, Managing Consultant, Bill Chaser Pty Ltd
