Invoice Payment Due – 5 Tips For Getting Invoices Paid
Every business in the UK relies on a steady cash flow in order to maintain normal operations and to continue to grow.
It is natural to expect payment when an invoice is due.
Every business owner knows that there are always those clients that pay invoices a number of days after they are overdue.
These are common, but with proper management can be planned for.
There are also clients who choose to ignore an invoice entirely, using tactics to avoid paying for as long as possible.
Outstanding invoices can be a serious risk to a business, and if they are not dealt with they can cause a lot of problems.
Federal Management has recovered millions of pounds worth of business debt for both large and small business owners since 2004.
Our debt collection agents are the UK’s foremost experts on recovering commercial debt.
As such, we asked for their advice on ensuring that businesses get paid on the invoice payment due date.
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What to Do when the Invoice is Due for Payment
If you have provided goods or services to a client, you should expect to get paid.
Most businesses provide some form of payment terms and conditions that explain what a client’s obligations are when they need to pay.
It is common for businesses to allow a period of 30 days, 60 days or 90 days.
If the due date passes and payment have not been made, you can declare the invoice as overdue.
Many businesses have in-house credit control teams that can manage outstanding invoices and ensure that payment is made.
Whilst this can be effective, there are always those clients that will go to any length to avoid making a payment.
There will be a point where it is not productive or cost-effective to continue to chase the debt in-house.
If this happens, the best course of action is to instruct the services of a professional debt collection agency.
This is the quickest and most effective way to recover your money, but there are a few things that can be done as a best-practice approach before this.
1. Set up Invoice Payment Terms
For most businesses in the UK, it is standard practice to require payments terms to be agreed upon before providing goods or services.
These terms will provide details on detail such as an invoice payment due date, penalties, payment methods and tolerances.
These can take the form of comprehensive terms and conditions, or they can be combined with other documents.
For example, many business owners are unsure how to put payment terms on invoice documents.
This could be as simple as stating that payments are due 30 days from the invoice date.
Doing this will prevent many debts from occurring, and will act as a form of protection if the matter needs to be escalated later on.