Approximately 50% of all invoices are paid late, below is a snap summary of average payment lag:

7 days from date of invoice Payment usually made on 14 days

14 days from date of invoice Payment usually made on 21 days

21 days from date of invoice Payment usually made on 28 days

If you have a repeat business relationship with your customer, did you ask them when they do their payment runs, a lot of larger businesses only do two runs a month, one at the month end, usually in the first week of the month and one mid-month, usually being released in the third week of the month. Any invoices that are due between those dates will drop onto the next run.

There are several different payment terms for example:

XXXX days from date of invoice

EOM End of Month

EOMF End of Month Following

XXXX Days End of Month

XXXX Days end of Month Following

Making sure you have the right payment terms in place which include the methods of payment you accept, where to send payment to and the number of days by which you should receive payment, though of course you will never object to being paid early. Terms must be clear and agreed before any goods or services are supplied, putting them on the invoice is only a reminder. Putting them on the delivery note is only a reminder, add them into your terms of business, your quotations and order acknowledgment.

Check your customer has set you an account up and set it up on your terms, if they do not accept your terms and try to enforce their own consider the value of the business, negotiating somewhere in the middle, how much will the delay in payment affect your cash flow?. If yours are 7 days date of invoice and theirs are month end then the reality is you will most likely be paid on the month end run, as their processing system will be set up around their terms. Even if you issued a demand letter when the invoice fell overdue and followed protocols they are highly likely to have paid before you had the opportunity to start any formal proceedings.

If you do not have any terms and conditions in place, or do not clearly understand their importance contact ICM for a no obligation discussion.