how to get paid on time

Whenever you make a sale, part of your negotiation must include agreeing your payment terms. If you don't get clients to sign these in advance, they will pay you when it suits them.

Ask what their payment cycle is. When are cheques written in the month? What if there's a query on an invoice? It is professional, not a sign of weakness, to ask these questions. Work out in advance what it is worth to you if they pay "on invoice", saving you the hassle of chasing them. Offering a discount is attractive to both sides.

Phone in advance

One technique to ensure payment on time is to phone a week after you have sent the invoice. Say, "We sent you invoice no. XYZ on the nth of May for £3000. I know it's not due for payment yet. But it is a large invoice for us and I am phoning to confirm you have received it and that it has been cleared for payment."

If it has, just check the date when payment is due, then fax a confirmation of the telephone conversation. Keep a copy of the fax with the invoice. This highlights any problems which you can resolve before the invoice becomes due.

The excuses

People trot out a host of excuses for not paying. Most are untrue. If they wanted to pay you, they would. Assuming there is not a genuine query with the invoice, the only real reason for non-payment is not having the money. Other reasons are make-believe. So if your invoice remains unpaid, be firm and persistent. Don't take NO for an answer.

The most frequent excuse is, "You've missed the cheque run on the computer." This is rubbish because cheques can still be written by hand. Another favourite is "You're not on my list for payment this month." It's surprising how few people query this and accept it as a valid reason. So ask firmly, "Why not?"

Who's first?

Large Companies usually assign a certain amount of money each month to pay outstanding creditors. Invoices for payment are then entered until the allocated amount is reached. Then a line is drawn and any outstanding debts are held over until the next month. I've been employed to make many such lists. Although they vary with the type of business, there is a pattern in the way they are compiled.

• At the top are always the essentials : water, electricity, telephone - what's necessary for a company to function.
• Next come anything to do with dispatch, as materials and finished goods must be delivered.
• Then come the big company suppliers in order of importance.

By now you will be wondering whether you will ever get paid. But there is a way of jumping the queue.

Those who shout longest and loudest get higher up the precious list. People who don't fuss are pushed to the bottom, not just of the current month but the next as well.

Become a hustler

Submit every invoice with a clear "pay by" date, matching the terms you agreed. If they ignore this, hustle by phone, beginning the day the payment becomes overdue. Your first calls may be met with excuses about their own cash flow. Politely point out that this is not your problem and ask if your invoice is authorised for payment. If not, why not? Any Company will soon get fed up with a barrage of calls asking for money.

If all this fails, and you are fairly local, phone in the morning and say you will be in reception at a specified time to collect a cheque personally. I have never known this to fail. It strikes panic into the coolest of credit controllers and a hand-written cheque is quickly produced.

Never lose your cool. If you are firm and polite, you will actually strengthen relations using these methods. Remember, it's your right to be paid, even if you are small.

Tax reminder

1997 second instalment tax payment for all persons with accounting year 31^st December 1997 is due on 20^th June 1997. Please ensure that your cheques reach us by 19^th June 1997. For any advice, please contact Jophece Yogo or Steven Muturi at Nairobi or Boaz Muzembi at Kericho.

Meetings of Directors

The directors of a registered limited Company, acting in concert as a Board, have overall responsibility for the company's organisation, resourcing and operations monitoring. They exercise control and make decisions at Board meetings. The meetings must be properly constituted and held regularly.

A properly constituted Board must have the required quorum and a Chairman. It is important that the Board meets in accordance with its schedule or as may be demanded by circumstances. The issues for Board attention include :

1. To develop, review and re-shape the company policies as well as ensuring that such policies are implemented as desired.
2. To promote the general business activities of the Company. These include creation of additional capital required to expand the business, where such capital should be obtained, business contracts with other Companies, and so on.
3. To deal with routine activities such as budgetary controls, appointment of additional staff and setting their terms of service, review information regarding cash flow and treasury management, amongst others.

How does the Board arrive at its decisions regarding various issues?

The normal procedure is to take a vote, either by a show of hands or some form of secret voting. In practice, most Board Meetings apply the principle of consensus.

Where voting is carried out, decisions are taken on the principle of simple majority of the members present and voting. It is important that the views of the Company Secretary be sought where it is unclear to the Board members how they wish to proceed.

A Company Secretary is professionally trained to advise on matters of Company and meetings procedures and legal guidance requiring compliance with the Companies Act, and other regulatory instruments.

The Company law demands that every meeting of the Board must keep a record of its proceedings by way of minutes. It's the responsibility of the Secretary to advise the Board on the nature and style in which minutes are to be kept. Since minutes of the Board record decisions arrived at, every such minutes must be signed by the Chairman and appropriately dated.

When minutes are signed by the Chairman, they indicate evidence of the accuracy of such decisions as taken by the Board when put to a test , say, in a Court of Law.

How then does the Board ensure that the meetings of the Directors are properly constituted?

Of particular importance are to ensure that appointment of Directors are supported by a Board resolution, that persons who may be prohibited by law to be appointed as Directors are not appointed. Such persons prohibited under the law include persons of unsound mind, bankrupt persons or those involved in criminal activities against whom the Court has made certain specified orders. It is also necessary to preconfirm availability of the required quorum for meeting.

We invite Directors to consult us in matters concerned with the meetings of the Board and decisions taken to ensure that they properly comply with legal requirements. Further, assistance can also be given through one-day workshop for Directors on the general management of meetings so as to ensure that their future meetings are more effective and most beneficial. Please contact us for details of the workshop.

Employees are our most valuable asset

You could earn more money under the new plan

We're reorganising to better serve our customers

We reward risk-takers

Performance will be rewarded

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Your input is important to us

ALEXANDER GRANT & ASSOCIATES

VICTOR HOUSE, 4^TH FLOOR, KIMATHI STREET, NAIROBI, KENYA

Telephones : 002542 221306 / 245694 Facsimile : 002542 224314

Although all reasonable care has been taken in the preparation of this news briefing, Alexander Grant & Associates cannot accept any responsibility in law for its contents. Clients are advised to seek independent professional advice before taking action in consequence of anything contained herein.