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Late payments are more than a nuisance — they can seriously disrupt your cash flow, limit growth, and cause unnecessary stress. For small businesses especially, maintaining a healthy balance between offering credit and getting paid on time is crucial. At Crean & Co. we believe that one of the most effective ways to take control is by setting up a clear, enforceable credit policy. Here’s how to create one that actually works — and protects your business.

Start With Clear Terms

The foundation of any good credit policy is clarity. Define your payment terms in writing before you do business with a client. This should include:

• Payment due dates (e.g. “14 days from invoice date”)
  

• Accepted payment methods

• Interest or penalties for late payment
  

• What happens if payment is not received
  

Ensure these terms are included in all proposals, contracts, and invoices. It may seem basic, but many disputes arise simply because terms were not clearly communicated.

Screen New Clients

Before offering credit, especially to new or unknown customers, perform a basic credit check. This could involve requesting trade references, checking online reviews, or using credit-checking services. If anything feels uncertain, consider asking for a deposit or offering shorter terms until trust is established.

Set Internal Limits

Establish internal guidelines on how much credit you’re willing to extend and to whom. This prevents individual team members from making ad-hoc decisions that could put your cash flow at risk. For example, you might cap credit at €2,000 for new clients until a six-month payment history is built up.

Automate Reminders and Follow-Up

Invoicing should be prompt and consistent. Use accounting software to automate reminders a few days before payment is due, on the due date, and if a payment becomes overdue. Polite persistence is often the key to getting paid.

Make It Easy to Pay

Offer multiple payment options, such as bank transfer, card payments, or direct debit. The easier it is to pay, the fewer excuses clients have for delays.

Enforce Consequences — Professionally

If a client regularly pays late, don’t be afraid to stop supplying until accounts are settled. Professional boundaries reinforce the seriousness of your terms and protect your business in the long run.

A strong credit policy isn’t about being inflexible — it’s about setting expectations and protecting your business. With the right structure, you can offer credit where it’s deserved, maintain healthy cash flow, and focus on what you do best.

If you would like to discuss your business needs. Call Crean & Co Accountants on 090 662 6680 or email info@creanaccountants.ie

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