For small businesses and start-ups, unpaid invoices can spell serious trouble. They can cause a halt to cashflow, which can cause problems when it comes to paying suppliers and such like. If you are having trouble with unpaid invoices, read on to discover some top tips.
Set expectations in advance
It is important to be upfront about your payment terms from the offset. You can’t simply implement terms once you have noticed that a client is taking ages to pay you. Before agreeing to working alongside a client, make sure they are aware of how and when your invoices need to be settled. For example, you could send them an invoice after product delivery or it could be on a quarterly basis. You may also demand payment after seven working days, for example.
Send your invoices on time
You cannot expect people to pay you on time if you do not act with the same speed when sending invoices, and delivering work for that matter.
Consider implementing a fine for late payments
It is a good idea to enforce a fine for any late payments. This will encourage clients to pay on time. Again, this is something you will need to make clients aware of before you send an invoice. Thus, if your clients do not pay within the time allocated, you could charge them a fee per day, add interest onto the bill, or charge a one-off fine. It is up to you.
Chase invoices straight away
As soon as your client has gone over the stated payment time, you should send them an email reminder. If they still do not make the payment within a couple of days, give them a call. It is better to speak to someone over the telephone because it can be much more convincing. People will be more inclined to ignore emails but it is not as easy to do so when speaking to someone directly.
Be friendly in your approach
It can be extremely frustrating when you are waiting for money you are owed, however, it is vital to be professional at all times. Do not swear or talk in a rude manner. Give them a friendly reminder to begin with. If this is still not adhered to, be firm but fair.
Hire an accountant
Last but not least, why not consider hiring an accountant? There are plenty of London accountants available and they will be able to take the weight off your shoulders. You can be confident that all late payments will be chased efficiently while you focus on the core of your business. When looking for the best accountants in London, you are advised to only consider those offering fixed fee accountancy services. That way, you can manage your payments a lot better, as you will know exactly what is coming out each month.
All in all, if you follow the tips that have been mentioned above, you should have more success when it comes to getting your invoices paid on time, which will allow for the smooth running of your business.