Overdue Business Invoice Collection – No1 Advice Guide
One of the main objectives of any business is to make enough money to support and further grow itself.
Regardless of whether you are a large business or a contractor not been paid for work, your invoices deserve payment.
It may surprise you to know that the simple process of providing services and getting paid is made difficult sometimes.
The occurrence of late invoice payments is sadly common for large and small businesses in all industry sectors.
Barclays reported that around 3 in 5 UK businesses are owed money as a result of late payments.
When invoice payments become overdue, this will cause cash flow problems that threaten the longevity of your business.
Continue reading our helpful guide on how to effectively undertake overdue invoice collection for your business.
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What Is the Invoice Collection Process?
Make sure that invoice details are correct
Before sending out the invoice to the client, you must check all of the information is correct.
This document is responsible for getting you paid, and if details are incorrect then the debtor has the right to dispute this.
Specific attention should be paid to the name, address, order numbers, purchase orders, costs etc.
If all details are correct, this should naturally reduce the number of invoice payments that need chasing.
Send out the invoice on time
It is no secret that sending the invoice to the client on time will result in a higher chance of getting paid on time.
This will give them a prior warning of the date the invoice needs to be paid, giving no real excuse to miss a payment.
Modern credit control or accounting software can do this for you automatically, which can help reduce the internal resources needed to ensure this happens.
Outline the terms and conditions of payment
At the onset, you should discuss any payment terms that may be on top of general terms and conditions.
This could outline that you intend to claim interest on any late payments, or that you wish to start legal action or court proceedings against the debtor.
The threat of legal action is known to be enough to negate any invoices payments becoming late.
Discuss payment plans with your debtor
If the client simply cannot pay for the invoice, it may be beneficial to discuss a payment plan with them.
This will split the cost of the payment up into smaller amounts, which will make it easier for them to pay.
Whilst you may not be receiving the full amount upfront, you will have peace of mind that this will be paid off bit by bit.
