Winning a new business deal or new client can be very exciting; even better is when the first payment from the new client hits your bank account. But, what happens when a problem arises and your client cannot or will not make payment on your invoice? It is tempting to ignore the underlying “paper trail” that supports your invoice when everything is going well. However, having a bonafide purchase order, delivery docket, timesheet, job sign-off etc. is often the difference between getting paid promptly and having a long (costly) argument with your debtor.
At FactorONE we encourage business owners to ensure that wherever possible:
- A written Purchase Order is provided by the customer;
- A signature is obtained from the recipient upon product delivery to acknowledge that the correct order has been received.
- Similarly, if a service is being performed have an authorised person sign off that the job has been satisfactorily completed.
- Most importantly, ensure that you have correctly identified yourself and your customer (name and ABN) on all paper trail documents. An incorrect customer name is often the easiest way for a debtor to claim that the invoice is not their responsibility.
Finally, it is worthwhile remembering that when a payment dispute arises you will not necessarily be dealing with the friendly customer you have known for many years - you could find yourself arguing with a Liquidator or Receiver who has been appointed to handle your customer’s affairs. This is not the time you want to discover that your paper trail is less than complete.
Don’t let a cold paper trail jeopardise your opportunity to get paid. Taking some simple steps now is a worthwhile insurance against future disputes.
