1 Don’t be afraid to chase payments and don’t be bullied into thinking you will lose the contract if you do

2 Agree terms of payment in advance with new customers as part of the sales process

3 Understand your rights. The law states that you are able to charge interest at 8% on top of the Bank of England’s base rate to all late payments owed to you

4 Ask customers to pay straight into your account by direct credit. This can save time on payment reconciliation

5 Reduce payment risks by asking for a deposit or advance before supplying goods or services

6 Customers are less likely to delay paying if they understand your payment policies from the outset. You
can change your approach depending on the customer

7 If a payment is late, demand the money. For debts over £750, you can issue a statutory demand. This is a formal demand for payment in a specified format. If the debt is still unpaid, you can petition the court to solve the problem

8 Keep records of all correspondence. These should be logged and copies of invoices should be kept

9 Review your credit checking procedures and run credit checks on clients bi-annually 

10  The Federation of Small Businesses offers advice on payment services (www.fsb.org.uk)

John Wright, national chairman, Federation of Small Businesses