Latest News

How to Deal with Unpaid Invoices


Unpaid invoices are inconvenient, regardless the size of your business, so you need to have strategies in place to keep your business going. Unpaid invoices can affect your business in every way because your cashflow is interrupted, meaning you won’t have the money to keep your business operational, like paying your employees or suppliers. This can also damage your reputation. Struggling with unpaid invoices? Here are some strategies to help your business.

 

Give discounts and charge a penalty

To encourage your customers to pay early, offer them a discount. A lot of businesses offer a 1 or 2% discount for the total of the invoice if it is paid in full within the first 10 days.

However, some people aren’t always motivated by these sorts of incentives, but they might be motivated if this invoice includes a penalty. By adding a penalty to an invoice, it will push your customers to pay you faster, as well as helping you cover the cost of financial issues you might have.  

 

Follow procedure and follow up

Before you message your client make sure you have followed the correct procedure. Did you send the invoice, and did you send it to the right person? Did you make the payment terms clear? What is the amount you are missing? Make sure you have answered all of the questions before you send any more messages to your customer.

Your customer might have been on holiday when you sent the invoice or could have been dealing with an emergency so they could have just missed the invoice, so when you chase them make sure you are polite.

 

Research your clients

To prevent unpaid invoices in the first place, research your clients before you do any business for them to make sure they don’t have any other prior complaints. Make sure that you keep detailed records after you’ve signed a contract and then ask for payments upfront.

 

Try factoring

You can sell any outstanding invoices, that are less than 90 days old, to a factored. Invoice factoring allows you to have a cash advance that is 80% of the total receivable. For more information about factoring, contact us!

 

Added: 25 Apr 2019 15:40


Back To Blog