Time to pay
We are a small practice and have always operated a 30 day time to pay with regard to our bills to clients. This seems to be mighty generous (especially in todays economic climate) and does not stop people taking the michael and extending this- sometimes taking 3 months or more to pay. We do have a late payment interest and fee clause but very rarely use it because of the hassle.
We need to review our billing and debt collection procedures because it has caused us cash flow problems in the past and wonder what works for other small practices. For instance, we are considering rewriting our letter of engagement to shorten the time to pay to 14 days with a formal letter following if payment is late and then another stronger one if 2 weeks late etc. but this does become time consuming.
In severe delay cases we clearly have to make a decision as to whether it is worth keeping the client as it is usually those who are last to pay that are the first to moan. Other things to perhaps consider are getting money up front or getting people on standing order.
What we do not want to do, though, is to upset any of the many good clients we have with a wholesale change to more draconian measures
All thoughts gratefully accepted!!