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!