Industry sector:

Vet: Cash from debtors

'Cash from debtors' means income you receive from account customers that you send an invoice to, usually at the end of the month. After they have been sent an invoice but before they pay, they are your debtors. When they pay you, the payment is referred to as Cash from debtors.

Decide whether you will offer account facilities, and if so who will be eligible - small animal practices may have almost no account customers but large animal practices are likely to offer payment terms as a matter of course.

Your account customers might be businesses such as farms, stables, boarding kennels and so on which use your services on a regular basis.

Payment terms

Agree payment terms with your account customers so that there is no confusion as to when invoices should be settled. You might, for example, require all accounts to be settled every month, perhaps by a particular day of the month. Alternatively, you might state on your invoice that payment must be made within, say, 28 days of the invoice date.

Make an estimate of the amount of income you are likely to receive from account customers each month, including VAT. Enter the amount in your cash flow in the month in which the money is due to be received.

If you offer latge animal services, you may find that some farmers need longer to pay you than the credit period you offer them, particularly at times when the farming sector is experiencing financial difficulty. Consider what steps you will take to recover any overdue amounts and whether interest will be charged on these.

Official Veterinarian

You may work as a part-time Official Veterinarian, for example carrying out TB testing for the Animal and Plant Health Agency (APHA). You will be paid an agreed hourly rate, plus expenses and mileage and it is normal to submit an invoice for work done monthly. Payment is usually received in the following month.

Your business stationery

Have some invoices printed for your account customers. A good printer will be able to advise you on layout, style and even content. If you are registered for VAT you must include your VAT registration number on your invoices.