Name: Bojangle Communications
Based: Ashtead
Website: www.bojanglecomms.co.uk
I introduced an early payment incentive, which has resulted in a 13-day reduction in the average time clients take to settle their invoices.
Previously, my long-term clients (those with a minimum six-month contract) were given 28 day payment terms, and invoices were settled in an average of 36 days. The best case was six days, the worst was 71!
Now, if a client settles an invoice within ten days of its date, they receive a 5% discount on their next invoice. The average time for payment is now 23 days and the longest time to settle an invoice this financial year has dropped to 39 days.
Strangely, the majority of clients don’t pay within the 10-day window to receive their discount, but the knock-on effect has nonetheless been positive not only on cashflow, but also in goodwill, as clients appreciate the gesture.
A big help is the KashFlow accounting package, which emails me when an invoice is overdue, and with just a few clicks I can email a reminder letter. KashFlow also has templates for second reminders and final demands and logs when these letters are sent off, which means I can easily keep on top of late payers.
The discount has meant a slight reduction in turnover, but the balance is a reduction in my stress levels as clients take less time to pay, cashflow moves faster, and I don’t need to pay a virtual assistant to do any chasing for me.
Lindsey Collumbell is marketing consultant at Bojangle Communications.
