Lou Draper and David Cormack, of PR firm Draper Cormack Group (DCG), estimate they had to write off $100,000 in unpaid invoices last year.

The business has been operating for two-and-a-half-years.

First there was a client that went into liquidation owing $20,000. "We were down the bottom of the list of creditors," Cormack said.

While the business was sold, the buyer did not have to take on the previous owner's debt.

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Then there was another client for whom DCG did a chunk of work upfront - but who then did not have the money coming in to pay what was meant to be an ongoing bill.

"They strung us along saying that they were going to try to turn the business around," Cormack said. "Now they're about to go into liquidation owing us $75,000."

It's forced them to rethink how they manage their invoicing.

"We're not as trusting as we once were," Draper said.

The business terms and conditions now make the owners of client businesses directly reliable for any outstanding money owing. DCG has also started to invoice in advance for ongoing work - and won't start the next month's work if the previous month hasn't been paid.

"We have mortgages, kids to feed, vet bills to pay," Draper said. "When we don't get paid for our work, if we are unlucky we default on the commitments we have made. "

Data from Xero shows the average invoice processed through its platform in August was eight days late.

Invoices with seven-day payment terms were paid on average almost 10 days late. Those with 20-day payment terms were paid, on average, 9.2 days late.

There are a few things you can do to get more of your clients paying on time.

123RF David Cormack said there should be a Small Business Ombudsman.

Check you know who your customers are:

Get lots of information before you sign up a new client. Make sure you have the right contact details and ensure that you could still get in touch with someone if the key person moved on.

Google will tell you whether there are a lot of complaints about a company, and you can also check them out on social media.

Christopher Walsh, a researcher at financial product research website Moneyhub suggested looking on the Companies Office register to see who owned the business and whether they were associated with any others that had gone into liquidation or administration. If there was a pattern of problems, you might choose to steer clear.

Cormack and Draper said there needed to be more protection for the clients of businesses that went into liquidation. "For so many creditors, that's the death knell and it's not their fault."

Set up your terms

It's standard to give customers a month to pay but if you're a new startup you could reduce that to seven days, to get money coming through more regularly.

Xero said about 75 per cent of invoices asked for payment within two weeks.

Walsh suggested checking in with the customer to find out what their payment cycle was - some businesses only pay their invoices on the 20th of the month but if you know this, you'll know when to expect it and chase it. They might disclose that payment could take even longer than that - in those cases, you could apply a premium to your quote to cover time spent waiting.

If it's a big job and you're new in business, ask for a deposit. Issue an invoice as soon as the work is done or the goods provided and make your terms clear. You could take a tip from electricity providers and offer a discount for early payment.

STUFF If businesses go under, their creditors suffer.

Draper said they had had no complaints about their new terms and conditions. "People have questioned it but we just explain we've been burnt before."

Keep track of your accounts

If you don't know what money is coming into your account, you won't know who still has to pay.

A good accounting system will help you track you invoices and flag those that are overdue.

Don't be afraid to send reminders and chase outstanding bills. Offer the option of paying in instalments if it seems you are unlikely to get the money any other way.

If you feel uncomfortable about chasing payment, you may be able to ask your accountant to help you. Cormack said having the firm's bookkeeper chasing outstanding bills helped. "It's the classic New Zealand thing of not wanting to confront. But when you're a small business it's what keeps you alive."

Walsh recommended, as a last resort, sending a threatening debt collection email - and following up by passing it on to an agency. You can also take court action to force payment of debts.

A member's bill from Labour MP Deborah Russell, the Companies (Disclosure of Payment Practice and Performance) Amendment Bill, would require businesses of a certain size to disclose their payment terms.

But Cormack said, even if it were drawn and passed, it would not solve the power imbalance that occurred when small businesses did work for big corporates who were slow to pay. Many were not in a position to reject work, even when it seemed payment could be slow.

He said there should be a Small Business Ombudsman to whom businesspeople could complain.

Do you have trouble getting invoices paid? Email susan.edmunds@stuff.co.nz