Industry sector: Consumer services

Aerial installer: Cash from debtors


'Cash from debtors' means any income you receive from account customers and other businesses and organisations that you send an invoice to, usually at the end of the month. After you've sent them an invoice, but before they pay you, they are your debtors. When they do pay you, the payment is referred to as Cash from debtors.

You'll need to decide who you'll send invoices to and who you'll ask for payment as soon as a job is completed. You'll probably ask all your private domestic customers to pay you there and then.

Business customers

You might decide to send invoices to all your business customers - for example pubs, offices and landlords - instead of asking them to pay there and then. Businesses are used to paying their bills like this.

If you do sub-contract work for other aerial installers - or perhaps for businesses like electrical retailers, builders, electricians and housing developers - then they'll probably expect you to offer them account terms too.

Agree payment terms with your account customers. You might, for example, state on your invoice that payment must be made within a certain number of days of the invoice date. For regular customers and contractors, you might require all accounts to be settled every month, perhaps by a particular day of the month. Contractors like builders may take a long time to pay.

Consider what steps you'll take to recover any overdue amounts and whether interest will be charged on these.

Other organisations

Other organisations that you might work for and offer account terms to include:

  • housing associations
  • insurance companies
  • local authorities

You may find that some large organisations want to pay you on their own terms. This is often a condition of the contract. Local authorities, for example, will often pay you between 20 and 60 days after the work is completed.

Sky

If you become an approved Sky Local Expert then you'll probably receive some payments from Sky. These may include:

  • commission for selling Sky packages
  • payments towards the cost of Sky equipment that you've purchased wholesale and supplied as part of subsidised Sky package deals
  • installation fees
  • productivity bonuses/incentives/prizes

Sky will pay you on their own terms and you may find that it takes quite a while for the money to come through.

Estimating your Cash from debtors

Make an estimate of the amount of income you're likely to receive from account customers each month. Base this estimate on the amount of work you expect to do for account customers, what you expect to charge for it and when you expect to get the money. Enter the amount in your cash flow - remember to put it in the month when you're actually due to get the money.

Your business stationery

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

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