Taking a front-footed approach by establishing good accounting processes and systems was a common theme amongst many of the responses, as was keeping payment terms relatively short.
Justine Mitchell, for example, the general manager of Wellington-based Boomrock, says they have seven-day payment terms. "Given we have long-term relationships with many of our customers, they support us by meeting these terms where possible. We are also fortunate to have minimal bad debt," she says.
Victoria Crone, managing director of Xero New Zealand, says sorting out payment terms and communicating clear expectations upfront is one of the most important things you can do to help get paid faster.
"Keep in mind that on average, regardless of the due date you give them, debtors only pay invoices two weeks after the date set. So if you need to get paid within 30 days for example, you may want to consider setting your terms at 13 days to be safe," Crone says.
But with even the best systems and communication, you're still going to get some overdue invoices.
Jo Williamson, who owns Howler Hotdogs with her husband Brent, advocates following up quickly on overdue accounts.
"Communication is very important, as in the majority of cases overdue accounts turn out to be innocent issues with paperwork," Williamson says. "If this isn't the case, we negotiate a payment date. Depending on the 'risk profile' of the customer this may or may not involve a credit hold being put on their account until payment is received."
And when a bill is overdue, nothing beats getting on the phone to sort it out, according to James McGlinn, co-founder and CEO of Eventfinda. An email might be easier to send, he says, but a phone call is harder to ignore and you can quickly get to the bottom of any issues the client might have.
"Get a commitment for the overdue amount to be paid within a few days," McGlinn also advises, "and if you haven't received the funds by the day following the agreed date, call again. Keep calling until you're paid - be the squeaky wheel."
Wyndi Tagi - WE Accounting & Business Services
Wyndi Tagi is the practice manager at WE Accounting & Business Services, which she owns alongside her husband Eli.
By way of background can you tell me a bit about WE Accounting & Business Services?
We are a Chartered Accounting firm, which opened for business three years ago. Initially we started with just Eli working in the business out of our office in Grey Lynn. Now I also work in the business, as well as four full-time and two part-time staff members, which has meant taking on a second premises.
Eli's background is in auditing and prior to setting up the business he worked for a large accounting firm and at the IRD as an auditor, so he oversees our accounting and business services. My background is in finance and sales, so that's my focus in the business, alongside marketing and customer service.
We also have five children between us - all boys - and we're part of the Grey Lynn Business Association and the Samoa Business Network.
What has been your company's journey in terms of managing cashflow?
We've always known that cashflow is king so we've tried to adopt practices that have allowed us to maintain and build our cashflow. Traditionally accounting firms charge an annual fee, but we knew this wouldn't help our cashflow and to keep our business afloat we couldn't wait a year to be paid.
When we were looking into accounting software for our practice we decided that Xero would work best for us and offer the best solutions to our potential customers. When we began looking into Xero further we found they worked on monthly invoicing and we decided we could adapt the same philosophy into our business and invoice our clients monthly too - breaking up our clients' annual accounting fees into smaller monthly payments. We decided that this was a win-win situation, because the client wouldn't need to find a lump sum at the end of the financial year and we could have regular monthly payments coming into our account.
We also agree on fixed costs for our services with our clients, so they don't get any nasty surprises. They know how much they will need to pay each month and we know exactly how much to expect.
You also receive payment from clients by direct debit. What effect has that had?
We started by allowing our clients to make automatic payments or direct credits into our account each month, but we found people would forget to make payments and we would spend a lot of our time following up.
So we decided to set our clients up on direct debits. This way we had control over the payments and could be more assured that payment would be made, and be made on time. Initially we were worried about what our clients would say, so felt uneasy to start with about asking, but it turned out not to be an issue at all.
To set up the direct debits with our bank we did need to meet certain criteria, but now that it's set up the process is relatively easy. In most cases we can get clients set up before their first payment is due and they like that it's one less thing for them to worry about each month. Processing at our end isn't too difficult; we just need to add any new clients to our direct debit list at the end of the month, or update new amounts for clients that have upgraded their monthly plans. It's definitely given us more certainty.
Do you have any other advice for getting paid faster?
The advice we give to our clients is to keep your terms of trade short. Once you've finished the job, request payment be made within seven days. If your terms are the 20th of the month, you could be waiting a couple of months for payment and if the client forgets to pay, you're waiting even longer. And if cashflow isn't coming in, you could be missing your own payment deadlines and getting yourself in the red.
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