Invoices aren’t everyone’s favourite part of owning a business, but they are a necessity if you want to get paid on time for your work. While we hope you already know how to process an invoice, we encourage you to continue learning how to improve your invoicing procedures. Hiring a collection agency for unpaid invoices is something that we always recommend if you find yourself in a tricky situation, but keep reading as we share the best ways to avoid this issue in the first place.
At all times when working through your invoicing process, ensure you remain polite and professional. No one will want to do business with you again if you get frustrated when sending an invoice and receiving a late payment. Remember, this is the final impression you get to make on a client after working together. Although you might need to be firmer when dealing with a company not paying an invoice, try to remain calm in the first place. All of your invoices should be written and formatted professionally, and they should always contain your payment details and company information. This will allow someone to get in touch with you if there are any issues and help to avoid unpaid invoices or legal action.
Don’t Be Afraid to Follow Up an Invoice
So many of us are afraid of losing future business or upsetting a client that we leave following up on an invoice until it’s too late. If a client hasn’t paid an invoice a few days before it’s due, send them a polite reminder of the due date. On the due date, you can then send another reminder, which could help you to avoid hiring a collection agency for unpaid invoices. Remember to stay polite and professional at all times, as we shared above. However, when it gets far too late in the process, it’s time to hire assistance for this issue. A collection agency will work with you to obtain the money you are owed and ensure this issue doesn’t happen again with the same client.
Provide Online Payment Options
Most companies do all of their business online nowadays. Therefore, you need to stay up to date and offer online payment options. Instead of sticking with more traditional banking solutions, find a simple online platform where you can receive and make payments. This will save you so much time, and your clients will be far more likely to make their invoice payments on time. In fact, within most industries, companies that offer online payment options are paid on average seven days quicker than usual. That’s a huge saving and can help your business to grow in the coming years, thanks to the extra cash flow.
Lay Out the Terms of Your Invoice
Your clients won’t know the terms of your invoice unless you lay them out clearly in your document. Make sure that you state how they need to pay the invoice and the date that the invoice is due. If you forget to add this information to your invoice, you only have yourself to blame for late payments. We recommend that you also mention late fees in your invoice, as this is much more likely to prompt companies to pay on time. When this isn’t mentioned, companies may think you are more relaxed about collection payments and not bother to pay until after the due date.
Avoid Invoicing at the End of the Month
While you might think it’s common sense to invoice at the end of the month, we recommend avoiding this for a few reasons. Firstly, the majority of companies will be issuing invoices at that time. It’s much more likely that your payment will be delayed than if you send it during the first half of the month. Companies are also often trying to keep within their budget at the end of a month or a quarter. Therefore, when you give them more notice at the start of the month with your invoice, you will be considered a top priority for payment. Financial teams are often flooded with work at the end of the month, so they’ll appreciate you spreading the work out for them.
By keeping these top tips in mind at all times, you can work to improve your invoicing procedures. It doesn’t take much time or effort to create an invoice template and reminder emails which you can use over and again as needed. If you do find yourself in a tricky situation, we always recommend that you use an agency that specialises in this field. Our team will be happy to support you and take the uncomfortable conversations out of your hand. Contact us today for more information and to discuss any concerns you have currently about unpaid invoices.