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Who wouldn’t want to make their customers pay their bills on time? As business owners we’re always aware of our cash flow situation. We’ll know who owes us money and when they’re due to pay us. We’ll also likely know who might pay us late because they ALWAYS pay us late.
Wouldn’t you like to try and make them pay on time?
HMRC have just started using one of the ‘tricks’ that’s been researched by the Government’s ‘Nudge Unit’ to persuade tax avoiders to do the right thing and pay their tax.
The trick … stick a handwritten post-it note on the letters that ask for payment. Simple.
The Government’s ‘Nudge Unit’, or Behavioural Insights Team to give them their formal name, use insights from behavioural research, tests and trials, with a view to ‘enabling people to make better choices for themselves.’ This could be getting people to pay their tax, using public services only when they need them, or making appropriate career choices.
The non-payment of tax is a similar scenario to the non-payment of invoices, so it might be worth the cost of a few post-it notes to see if it makes a difference to whether the serial late payers start paying on time.
What do the notes say? Nothing particularly earth shattering. HMRC simply say “Please give me a call if you would like to discuss”, followed by the first name of an individual and a phone number. That’s it.
They’ve also tried highlighting previous late payments (e.g. ‘Your payment was late last time, so if there are any issues please call …) or their payment performance compared to the wider group (e.g. ’90% of our customers pay their invoices on time …), both of which result in a upturn in payments.
Give it a try and let us know how it goes!
We’re always happy when a new person joins the Ormsby Street team. We get an injection of new experience, a new outlook, a new voice that can question why we do things the way we do. It’s an opportunity to sanity check how we’re going about things.
Today we’re joined by Matt, who’s coming in to support our commercial activities with channel partners, and he’s also a young entrepreneur keen to make a difference.
Matt’s our first recruit who is taking part in the New Entrepreneurs Foundation, a programme designed to take the best young entrepreneurs and give them the tools to make a difference in the business world.
He’s with us full time as any other team member, but he gets some time away from the business to attend events as part of the programme, learning about strategy, negotiating, intellectual property and much more.
Hundreds of young business people have graduated from the programme, going on to start businesses of their own, employing hundreds of people and raising millions in funding, and we’re pleased to play our part.
Matt’s going to get exposure to all aspects of our business, from how we build our small business software tools, to understanding our customers challenges, and how to sell into the enterprise market. In return, he’ll bring his learnings from the programme into our processes and approach. It’s a win win!
Great to have you on board Matt!
We recently contacted our customers to see if they were willing to share their experiences when it comes to late payments and they were more than happy to share the challenges faced by small businesses in the UK.
In the first couple of years we struggled massively with cash flow. We have to pay for materials & labour and only on completion of a job are we allowed to invoice which we then wait on average 50 days to get paid. Money is so tight that myself & my husband do not pay ourselves big wages
I’ve used your debt recovery service on two occasions when client just didn’t pay and on both occasions the legal letter was enough to get a payment within 1 week.
The trouble is we are a relatively small business that bigger companies seem to think can bank roll them whilst they get their work done.
From stories on no wages for the business owners for months on end through to legal proceedings after 18 months of debt chasing, small business owners are a sturdy bunch and we’re happy to say all of them came out the other side and are continuing to battle for money they’re owed.
As a reward for sharing their stories, the following companies receive these gifts to bring some positivity to their working day:
Proserve Building Solutions in Portsmouth receive a brand new Apple Watch, whilst MB Fire Protection of Dartford and Rutland Scaffolding based in Rutland both receive a year’s subscription to Evernote Premium. All will receive a year’s free access to our credit information tools.
There will be more on late payments from our small businesses as we share more on what they were faced with and how they’ve developed approaches to handling one of the major challenges of being a small business owner
Checking LinkedIn today I saw a post about a coffee shop in Bristol which was suffering because of works that the council were undertaking on a nearby bridge which was directing customers away from the cafe.
I used to work with a customer who had an office just across the water from their location, and it came to my attention from a member of the customer team I worked with.
It’s a great example of the challenges that small businesses face on a daily basis. You think you’ve got your business plan all sorted and then something unexpected happens and you’re up against the wall. In this case it’s important local infrastructure works, but many times it’s one invoice that’s not been paid because of a problem down the supply chain.
But in this instance the joys of social media have taken over and the cafe is gaining important attention which is driving some people for a latte or a crepe. One person’s desire to help has proven to make a difference.
There are thousands of businesses across the country experiencing similar problems, so if there’s one you know that needs a helping hand, then help them out. It doesn’t need to take a lot of effort but could make a lot of difference.
You’ll miss them when they’re gone!
Most small business owners get told that it doesn’t matter if they have a good idea or great service but what really matters is that they have an effective cash flow or else they won’t survive. And it’s true, cash flow is the lifeblood of any business, and as such we should do everything we can to ensure the flow keeps flowing. However we’re soon to be entering the season when folks disappear off to the seaside which means they aren’t signing off invoices. It’s holiday season!
Many businesses will have reduced staffing levels during the holiday period, which means your customers won’t be paying any of their bills. In the meantime, you’ll need to be paying your employees holiday pay and not getting in any more new business as your team also head off to get a tan.
There are however a few simple things you can do in order…
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…they buy why you do it.
That’s what Simon Sinek argues in his powerful TED talk and it’s hard to disagree.
I witnessed this firsthand when on our Easter break at Croyde Bay (a beautiful part of the world that I recommend visiting, by the way).
Down by the beach, in a surf shop we met a lady who was running her own small jewellery business.
There’s nothing remarkable about someone making and selling jewellery; granted. However, this lady was making exquisite pieces of jewellery from pieces of glass and pottery that had all been sourced from Croyde beach.
Now, people love Croyde. They just do. You come away wishing you could take a part of it with you and that is why this lady was doing what she was doing. She wanted to make it possible to take a piece of the place you love away with you, in the form of a beautiful piece of jewellery.
Like many others, we were in.
We bought why she was doing it and my wife left with a very pretty green “sea glass” ring.