I’d be interested in hearing from any of my readers who run a business on this one…

Running the financial side of my village magazine is hardly a full time job. I probably spend four hours a month on it and as you might expect, I’ve heavily automated it.

The stone in my shoe, though, is people who pay late. It’s particularly ironic that many of our advertisers are tradespeople, who, no doubt, would be hacked off if their own customers took two months and three reminders to pay an invoice.

Question is, though, what payment terms should we be putting out?

At the moment, I put “due 30 days from invoice date”, because that’s what I inherited.

With another hat on, the invoices for the church hall all have seven day terms on them, with one-off hirers required to pay in full, in advance, and “regulars” having seven days to pay after the end of the month in which their hire takes place. OK, so if your hire was in the first week of the month, you might just have got 30 days’ interest free credit there.

Really, though, I think the seven days is the way to go. 30 days surely dates back to a time when invoices went out by post, adding 72 hours’ delay, then the cheque had to go back by post, and get physically taken to the bank, and the recipient probably only got a statment once a month by post too.

In this day and age, though, invoices should be e-mails and payments should be online and near-real-time. I appreciate that larger organisations may only do one payment run per week, or even just a couple in a month.

What always surprises me, though, is when (many/most) businesses bigger than a one person show routinely schedule their payments for the last possible day of the 30 day period. Is this really necessary or useful?

I appreciate cash flow can be a tricky thing, but for invoices below a certain amount, wouldn’t it just be easier to pay them immediately? Is your cash flow really so bad you need to wring 30 days’ credit out of a volunteer-run organisation like a village magazine?

All thoughts welcome, but I’ll be pushing to change to seven day terms.

Not to mention an admin fee for the last few hold-outs paying by cheque. In 2024.