Invoice Payment Due – 5 Tips For Getting Invoices Paid

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.

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.

2. Send a Payment Reminder Email

The first step to take when an invoice is overdue should be to contact the debtor and send a payment reminder to them.

A good way to do this is to send a reminder via email, recorded post or on a phone call.

If you choose the latter, you should record the conversation and document it in case it is needed in the future.

This should be polite and professional in tone and remind the client of their obligation to pay.

It should not be confrontational or aggressive, as this may give the debtor grounds to withhold payment,

There may be a simple explanation as to why the invoice payment due date has been missed, and sending a reminder is a good way to resolve the situation quickly.

3. Allow for any Payment Method

Making it easy for a client to pay you is a good way to ensure that overdue invoices are avoided and payments are made on time.

Most businesses already allow for a payment to be made via bank transfers, credit cards, direct debits and standing orders, but there are more ways to help clients pay.

For example, some clients may be experiencing financial difficulties and will be unable to pay the invoice amount in one lump sum.

If this happens, it is advisable to request a part-payment instead, where the client pays a portion of what they owe now and the rest later.

Another way to help clients pay is to allow for a payment plan to be implemented.

This is where a client can pay the full amount over the course of an agreed period of time in a way that they can afford.

Making it easy for clients to pay you will help to negate the number of overdue invoices you have.

4. Make All Invoices Clear

Often, clients will claim that the information on an invoice is unclear, and will dispute it or withhold payments when invoice payment due dates come.

Whilst most businesses document are already clear, many debtors will use almost any excuse to avoid paying.

Ensuring that your documents are clear and concise will help to negate this, as will including the payment due date on the invoice.

5. Use a Debt Collection Agency

If you have prepared all necessary documentation and reached out to the debtor but have still not been paid, it is time to seek professional help.

Whilst there are several ways to recover money that is owed to your business, the most effective method is to instruct a professional debt recovery agency.

Not Been Paid on an Invoice Due Date? Instruct Federal Management

Federal Management is the UK’s leading commercial debt collection agency.

Since 2004, we have helped thousands of businesses recover millions of pounds in unpaid invoice fees.

Contact us today for a free pre-action assessment of your debt.