ICM advice on payment terms for SMEs proves to be in demand
6 October 2011
Agreeing payment terms is the single biggest issue worrying SMEs, according to a leading business organisation.
The Institute of Credit Management (ICM) reports that its Payment Terms guide, produced by the ICM for the Department of Business Innovation and Skills (BIS), is proving to be by far the most popular of the ten guides available, with download figures outstripping the others by three to one. More than a quarter of a million guides have been downloaded in total.
The guide provides helpful advice to small businesses on the potential pitfalls of agreeing payment terms and gives tips for best practice. It warns small businesses that making assumptions about terms can be dangerous, and that formally agreeing them beforehand is vital: “Set out and agree payment terms in advance and in writing,” says Philip King, Chief Executive of the ICM.
“It’s better to know what to expect than to leave things to chance and wonder why the money hasn’t arrived later.”
The guide also advises SMEs to be vigilant for any changes to wording in documents from a customer, and provides suggestions for deterring late payment or prompting action from an evasive debtor: ‘Raising a further invoice for interest and late payment charges is an excellent way of gaining your customer’s attention and raising the profile of your outstanding invoices.’
Philip says that the download statistics provide significant insight into the primary concerns of small enterprises: “For a second year running, the Payment Terms guide has seen the highest number of downloads, though this year by an even greater margin.
“Businesses are realising that in today’s uncertain economy, it is even more important to tread carefully and not take unnecessary risks. Having an increased awareness of one’s own payment terms – and the implications of those terms – is one of the best ways that a business can protect itself.”
He added that the ICM was pleased to be able to equip SMEs with the information that they were looking for: “These high download figures suggest that much-needed advice is reaching its target audience, and that is evident across all of the guides in the series, a quarter of a million of which have now been downloaded in total.”
The Payment Terms guide is one of ten titles available in the Managing Cashflow series, which also includes ‘Invoicing’, ‘Chasing Payment’ and ‘When Cash Runs Short’. These can be downloaded from http://www.creditmanagement.org.uk/bisguides.htm