12 minute read
GET YOUR CUSTOMERS TO PAY INVOICES ON TIME
from Spotong Issue 38
by 3S Media
By Viresh Harduth, vice-president of small business, Sage Africa & Middle East
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For small and medium businesses, getting paid on time is one of the biggest administrative headaches. After all, when customers don’t pay on time, cash flow takes a knock and you need to borrow money to pay suppliers and service providers. Let’s not forget that nobody enjoys the awkward conversations and annoying admin that go along with chasing up payments. Knowing how to prompt customers to settle their accounts on time, without harming your relationship with them, is an essential skill for every small business owner to master.
Here are five tips about how you can get people to pay up by the due date, while reducing the stress involved:
1. Invoice accurately
One of the best ways to get paid fast is to ensure your invoices are error-free and comply with the customer’s requirements. Include the details they ask for, such as contact and company details, purchase order (PO) numbers and breakdowns of costs for different line items. If you’re dealing with a bigger company, it might be worth checking upfront what information they want on the invoice and which formats they prefer.
2. Make it easy to pay
Your goal should be to make it as simple as possible for someone to pay when they open your invoice. Ensure it’s easy for them to find your banking details on the invoice, for example. Some payment platforms let you include a click-to-pay option in your digital invoice. Especially when dealing with consumers rather than businesses, offer a range of convenient payment options, including debit and credit card, SnapScan, Zapper, QR code, EFT, and instant EFT.
3. Communicate clearly
Ensure customers know and agree to your payment terms (whether they are on presentation of the invoice or 30 days) before they buy a product or service from you. Include your standard payment terms on every invoice to remind them.
4. Put processes in place to remind customers to pay
This tip is absolutely vital. No-one enjoys running after customers to ask for overdue payments. Putting procedures in place for this task can take some of the pain out of it.
Here are some ways to remind people to pay your invoice, including how to escalate matters for late payment or non-payment: • Add receipts to your emails and resend the invoice so you can see if the recipient opened them. • Send an invite to a short meeting to talk about the late payment. This should only be a 15-minute slot but seeing it in their calendar will remind them you need to be paid. • For smaller businesses, you may wish to be lenient. You can ask if they need help paying and could offer to split the invoice over two months to help with their cash flow. You could also remind them that they can pay in a way that suits them best. • Appeal to your customer’s better nature.
Explain that you’re a small business and having payments made on time is crucial.
5. Automate processes
Some accounting solutions will automate parts of the invoicing process, minimising the need for manual data input and the room for error. This will also save you a great deal of time so you can focus on the areas of your business that add value, whether it’s strategy, sales or customer interaction.
Late payments are still a headache
While several large South African companies recently pledged to pay small and medium businesses faster, the issue of late payments still looms large. Late payments not only impact cash flow for many businesses, but they could threaten the survival of many beyond the Covid-19 pandemic.
During this crisis, it pays to work with your customers to ensure prompt payment. Open discussions around the fears and pressure points your customers are facing will help you decide on a reasonable compromise or set out clear payment terms from the offset. It will also help you maintain a good relationship throughout these uncertain times.
DO YOU DREAM OF SEEING YOUR OWN BRAND ON THE SHELVES OF PICK N PAY, CLICKS AND DIS-CHEM? HERE’S YOUR CHANCE!
THE CLICKS GROUP ACCELERATES LOCAL SMME SUPPORT
The Clicks Group has ramped up its incubation support for local blackowned businesses, with the launch of a new SMME supplier listing portal.
This forms part of a raft of measures taken to support small-, medium and microenterprises across the Group’s supply chain, says Clicks Group Corporate Affairs Director Bertina Engelbrecht.
The Clicks Group has invested over R500 million in SMME suppliers in the past year and is working closely with the Department of Trade, Industry and Competition to accelerate local procurement.
“The Clicks Group recognises that SMME development is critical in creating jobs and building a healthier economy,” Engelbrecht says. “We are committed to removing barriers and have worked hard to implement a SMME trading framework that will ease entry into the Clicks eco-system.” The SMME trading framework offers commercial and business support in the form of marketing, promotions, shared shelf space and business mentorship.
The Clicks Group has been supporting local SMMEs for the past ten years and is a longstanding advocate for multicultural hair care products.
“Since 2005 to date, we have grown local hair care brands on shelf by over 743% percent, with a significant investment in black womenowned businesses,” Engelbrecht says.
“It has been extremely rewarding to see local brands such as AfroBotanics, AfriBerry and Portia M become established and enjoying success in the local market. In fact, Portia M has experienced rapid exponential growth to the extent that it can no longer be classified as an SMME,” explains Engelbrecht. The Clicks Group intends to target over R4,5 billion worth of procurement spend with black-owned SMMEs over the next three years.
Since January 2021, Clicks has helped to bring six new black-owned suppliers in the haircare and personal care sectors to market, including Masodi Organics’ range of natural hair and body products and AfroBotanics’ new multicultural hair range, Kaio.
A further 12 suppliers are planned for launch by the end of 2021.
This is over and above the existing eight blackowned SMMEs that are currently listed in these categories.
For more information, please visit www.clicks.co.za/supplier-development or e-mail NewBusiness@clicksgroup.co.za
DIS-CHEM, IN COLLABORATION WITH THE DEPARTMENT OF SMALL BUSINESS DEVELOPMENT, WANT TO STOCK MORE LOCALLY PRODUCED RETAIL GOODS
In acknowledgment of the call by government to boost local manufacturing and job creation, Dis-Chem is working in close collaboration with the Department of Small Business Development in a national drive to stock more locally produced retail goods.
The initial goal is for major retailers, such as Dis-Chem, to stock about 400 locally produced items, in time rising to over 2,000, as part of a national strategy to grow manufacturing locally.
This comes at a time when many small and medium-sized enterprises (SMEs) are in desperate need of life support during the Covid-19 pandemic and consequent economic lockdowns. The sector remains vital to South Africa’s recovery, notwithstanding growing numbers of liquidations. A Bureau of Economic Research study estimates the number of SMEs to be in the region of 2.2-million. These contribute considerably to the South African economy and create over 11 million jobs.
Estimates vary widely, because even without a crisis such as the pandemic, between 70% and 80% of start-up businesses typically fail within two years. Such numbers are staggering and tell a tale of the need for support to ensure more businesses survive and create employment.
“We have a long tradition of celebrating those pioneers who dream big and do whatever is needed to bring an idea to fruition. Dis-Chem started as a small business with one store, so we understand what it takes to grow an organisation. As a company that supports businesses, we support and mentor entrepreneurs and we are fortunate to have partnered with some small businesses that have grown significantly in recent years,” says Saul Saltzman, executive director at Dis-Chem.
“We are both gratified and excited that we can tell the real stories of everyday South African business owners. Through them we hope to educate, empower, and inspire more entrepreneurs to pursue their dreams, and ultimately contribute to the development of our country.”
Dis-Chem is renowned for its health products, a category that has grown in recent years through support of small suppliers whose products are ideally suited to Dis-Chem’s range and meets their quality criteria.
TRUE EARTH
“F rom a commercial perspective Gauteng-based, True Earth, manufacturers of gluten free cereals and snacks, was given an opportunity to launch its products with us and grow their business,” says Saltzman. Dis-Chem provided guidance to Nokwanda Shabalala, founder of True Earth, on the typical manufacturing standards expected by a firm like Dis-Chem and assisted her to select the correct manufacturing partners. Dis-Chem also evaluated her labels and provided direction on how to get them fully compliant with regulations, which can be an extremely complicated exercise for individuals who are not familiar with the process and requirements.
Knowing Dis-Chem’s health focus, Shabalala sought a meeting with the company’s management. “It all started with a cold call to Dis-Chem which led to a visit. At that time, I hadn’t commenced manufacturing – I took along samples of the three gluten-free cereals we had at that point. The Dis-Chem team gave us some valuable pointers at that first meeting on what health seekers require from a product to establish consumer trust.”
“Apart from food safety, the next most important aspect of health products is the labelling and packaging, which Dis-Chem’s consultants worked on with us. The packaging has to be thorough and clear to comply with the law and Dis-Chem advised throughout this process so as to avoid costly mistakes.”
A third aspect, where Dis-Chem is vital to the viability of emerging suppliers, is their payment terms. “Typically, payment terms are 90 days, but Dis-Chem advanced us a supply-chain facility which eased cashflow. This is key for a small start-up supplier and helped establish the viability of our business.”
This was the launchpad for True Earth, which has since broadened out to supply additional retailers and health stores. “We were at first operating on a shoestring with extremely limited cashflow. Nonetheless, we developed an additional new product line which unfortunately came to market exactly as Covid hit. While other retailers would not even consider a new supplier at that sensitive time, Dis-Chem stocked it on a much wider basis than a new product would typically warrant,” says Shabalala.
USISI BRANDS
Sion Venter, director of Usisi Brands in Cape Town has developed a variety of food herbs and spices targeting people looking for healthy alternatives which are sugar-free, non-irradiated, msg-free and contain no other fillers. Usisi has largely targeted the uniquely ethnic market, but as a healthy alternative to what is already available.
Little was required from a compliance and food safety side with Usisi. “We gave them some advice on labels but all they needed was a boost from a retailer like Dis-Chem that would take them on,” says Saltzman.
“Our presence in Dis-Chem initially started fairly selectively but our brand is now stocked in about 140 stores. I approached Dis-Chem initially as I had previously worked with them in another spice business. I always liked working
PICK N PAY CALLS FOR MORE WOMEN ENTREPRENEURS TO INTEGRATE INTO SUPPLY CHAIN
Whether it’s pre-cooked meals, haircare products or pet food and more, Pick n Pay customers each day are purchasing quality goods produced or sourced locally by women-owned businesses.
“Women-owned business are a really important part of our supply chain. They help us provide an excellent service and some of the best-loved products to happy customers,” says Mishinga Seyuba-Kombo, head of enterprise development at Pick ‘n Pay.
This Women’s Month, Pick n Pay will recognise and celebrate its women suppliers and the contribution they make by ramping up efforts to encourage more women to come forward and take up the challenge to become entrepreneurs. Pick n Pay will host a series of talks with some of its top women SMMEs, shining a spotlight on their journey to becoming entrepreneurs, and sharing their tips and knowledge of how to become an efficient and quality supplier to big businesses.
A 2020 survey by SME South Africa indicated that 47% of all SMEs in South Africa are women-led and are more likely to succeed with the right assistance, particularly from big business.
Pick n Pay’s Enterprise and Supplier Development (ESD) programme provides a holistic package of support for SMMEs and provides opportunities for them within its supply chain. The objective is to integrate the businesses it supports into the Pick n Pay supply chain.
“We want to encourage more women to take that leap of faith and become entrepreneurs. Many of these businesses or services have the potential to succeed and help create jobs. It’s a real privilege to stand behind them and support them all the way,” says Seyuba-Kombo.
The Pick n Pay ESD programme offers structured support to SMMEs
Support: Provide mentorship and business support
Scale: Develop strategies and programmes to increase productivity and delivery of SMMEs within the Pick n Pay supply chain
Sustain: Promote and facilitate all aspects of SME supplier development
Key stats and facts about Pick n Pay and its SMME suppliers
• +2 000 black-ownded SMMEs in Pick n Pay's supply chain • +50% of all black-owned SMMEs are women-owned • Pick n Pay's spend on black women-owned SMMEs increased from R2bn in the 2019 financial year to R5.4bn in 2021 with Dis-Chem and so automatically looked to do business with them again. They have a health food section which is steadily growing and is a lot wider than most competitor stores. They were also prepared to grow my health brand and offer me good support and increase my brand awareness,” says Venter.
“Shoppers are exposed to countless brands every time they enter a store, but what they don’t realise is what it means for smaller brands to reach national supply in a major retail group. For many, they have a fantastic product but aren’t fully cognisant of the regulatory and compliance issues that are needed. Some are not aware of quality standards that need to be adhered to before being considered by large groups. These details can be a minefield for small entrepreneurs, and we are so pleased that our approach to growing small businesses has resulted in some true success stories,” Saltzman concludes.
