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Lfr On The Money Ahb

LFR's latest ‘On the Money’ feature focuses on how businesses can manage the problem of late paying customers.  With the problem of late payment showing few signs of subsiding, Alex Hilton-Baird, Managing Director of commercial debt collection agency Hilton-Baird Collection Services, looks at the measures businesses should take to safeguard their cash flow.

“The issue of late payment remains a constant thorn in the sides of businesses large and small.

Research from Bacs Payment Schemes has highlighted just how difficult things are at present. It found that there was £36.4 billion owed to UK businesses in overdue payments at the end of June. This equates to the average business being owed a shocking £36,000.

But while the debate surrounding what can be done to reduce the problem continues, it’s important for businesses themselves to do all they can to ensure their processes are as watertight as possible:

Set clear procedures

Often overlooked, it is important for businesses to implement and stick to a credit policy. This should define the step-by-step set of procedures across the business that should be followed from the moment a customer places an order, ending only once the invoice has been paid in full. This will ultimately improve efficiency and reduce the likelihood of an invoice slipping through the net.


Know your customers


As soon as an order is received, perform credit checks to ascertain whether the customer is creditworthy or has a history of paying late. Hilton-Baird Collection Services’ Late Payment Survey found that just 47% of businesses credit check new customers, with only 30% regularly assessing the creditworthiness of existing customers. This information can then be used to determine the length of the credit terms offered, or whether payment is requested up front.

Invoice on time

It may sound obvious, but invoicing immediately will help to speed up payment times as many customers won't pay until the invoice is received. Just as important is the accuracy of the information on the invoice; any mistakes and customers could well delay payment further. A quick call to confirm receipt of the invoice and to check there are no disputes can help to identify any problems early on.

Make payment easy

Just one in five businesses cite cheques as a preferred payment method according to the British Chambers of Commerce, yet two in three accept them as a form of payment. Cheques are susceptible to a range of excuses, so offer customers fast and simple payment methods such as direct debits, standing orders and BACS payment. Clearly display the accepted payment methods and details on invoices and note it can also be beneficial to offer early settlement discounts.

Be proactive

Make sure you’re aware of when each invoice is due. Chasing payments as soon as they exceed terms will mop up any genuine mistakes from customers, but also serve the purpose of demonstrating that you are in control. Should reminders continue to go unanswered, consider the benefits of using an outsourced debt collection agency. This will increase the likelihood of a full recovery and enable the accounts receivable team to focus on ensuring other invoices don’t follow down the same route.

Exercise your rights


Did you know businesses have a right to charge compensation and statutory interest on overdue debts? While this will help cover the cost of an invoice not being settled on time, it can also act as a useful deterrent to prevent customers from delaying payment beyond terms in the first place.

Focus on what you do best

Chasing a single customer for payment can be a drain on internal resource and also detract from the rest of the sales ledger. It also takes the attention away from identifying and securing new business. For this reason it can be useful to enlist the help of specialists who can assume control of your credit management, providing additional peace of mind.

Say thank you

Show appreciation to those who pay on time. This will make customers feel valued and being polite can go a long way towards securing repeat business.”


About Alex Hilton-Baird: Alex Hilton-Baird is Managing Director of Hilton-Baird Collection Services, which is part of the Hilton-Baird Group of companies. Established in 2001, Hilton-Baird Collection Services provides award-winning outsourced debt collection services to the UK's SME and corporate markets, as well as some of the most respected invoice financiers, leading banks and insolvency practitioners.

Hilton-Baird Collection Services was voted Commercial Debt Collection Agency of the Year in 2008, 2010 and 2011 by Credit Today magazine. In addition, two of its employees have been awarded the Commercial Collector of the Year title, with Team Leader, Charlotte Christie, winning in 2010 and Senior Collections Advisor, Peter Hepburn, winning in 2012.

Find out more about Hilton-Baird Collection Services’ range of debt collection services at www.hiltonbaird.co.uk/CS.


For more information, please contact:
Alex Hilton-Baird
Managing Director, Hilton-Baird Collection Services
Tel: 0800 9774848
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.