Transparency is essential to good customer service. Being transparent with your customers can improve customer loyalty and brand reputation, and build stronger relationships with suppliers too.

A key part of this transparency lies in the way you manage your financial accounts. Being open and transparent about payment dates and processes can mitigate risk of failed or missed payments in the future, and therefore have a financial impact on your business too.

It’s important for any business, regardless of industry or target market, to be transparent about what they do and how they work. Here are my tips to help you plan a more transparent approach to payments and improve your customer/supplier relationships in doing so.

Always do your due diligence

Thanks to services like Company Check, businesses of any size can access credit data, CCJs, payment history and risk scores of any registered company. Tools like this allow you to better understand companies you seek to work and for them to better understand your company too, giving everyone the opportunity to be transparent with their finances from the start.

Be transparent in your terms and conditions

It is essential that both parties have fully understood and agreed to the terms and conditions of the contract before any work begins. It is important that you take time to sit down and explain the contract so that both parties are aware of the policies in place for scenarios including late payments, project milestones and payment structure.
Agree a transparent payment structure

Ensuring a payment structure that works for both parties is vital for any business but is most common for ongoing service providers and for businesses that allow their clients to pay for their expensive products on finance. Taking multiple payments throughout the project will minimise the risk of unpaid invoices and can help to manage cashflow if payments have been split across the project rather than payment being taken once the task is complete.

Be firm with deadlines

Be transparent with how lapsed payments will be managed at the agreement stage. Being clear with your client and explaining how missed payments will be handled can reduce the risk of late payments and will make it easier to manage lapsed payments if they do occur.

Make your invoices clear and easy to understand

Agree an invoice format that works for both parties e.g. email or post and also agree when the invoices will be sent, either at the end of each month, weekly or at a time that suits both parties. This will ensure that invoices are received successfully at a time when payment can easily be made by the client. It is important to agree payment terms so both parties know when the invoice should be paid.

It is recommended that a standard numbering system is in place so it is easy to refer to invoices when required.

 

By Mariah Tompkins, WKM Accountancy Services.


comments powered by Disqus