![]() ![]() ![]() Some clients never intend for their invoices to become overdue they just forget to pay them. Show Sympathy (and Consider an Installment Plan) A phone call could be the friendly reminder they need to avoid a late penalty, but calling too early or often can come across as pushy. It’s typically best to avoid calling your client on the telephone until a day or two before the due date. If you don’t hear from them, send another notification a week before. Send a reminder email two weeks before the invoice is due to give your customer plenty of time to prepare their payment. Accounting software programs like QuickBooks are helpful in this regard, as you can schedule payment reminders to send out if you haven’t received payment by a certain date. Instead, stick to a set invoice schedule from the start. But striking a delicate balance of persistence and tact will enable you to collect on your debts without scaring off your clients.ĭon’t just send one reminder and consider it taken care of. That’s a reasonable fear - being aggressive will only drive customers away. Use Tact and PersistenceĪs discussed above, many small business owners are tentative about contacting their clients for unpaid invoices because they fear that they may come off sounding too aggressive and offend their customers. If you don’t get a response, call them directly. Start with a friendly email that includes your contact and payment info, which could be the source of the problem. If you’re having trouble with unpaid or overdue invoices, the problem could be that the buyer is not getting them to AP, or not getting them there fast enough.Ĭontact the department and let them know that your invoices are overdue. Smaller businesses may not have an AP department, but if your clients are large corporations, they should.Įven if you’re used to sending your invoices to the buyer, accounts payable is the department in charge of paying you. Send the Bill Directly to the Accounts Payable Department Let’s discuss some effective ways to ensure your payment requests are answered. However, determination alone won’t get your clients to pay up. With all these factors in mind, businesses should be determined to collect unpaid invoices in a timely manner. ![]() How to Speed Up Payment for Outstanding Invoices When the money that you should have made from services or products rendered goes unpaid, you lose out on potential interest earnings. Money in your bank account can accrue interest. An excessive amount of late invoices could even put your company out of business.ĭue to the time value of money, the longer the original invoice goes unpaid, the less the payment is worth to you in the long run. Many business owners are required to take on debt just to cover their operating expenses. You could find yourself unable to pay vendors, employees, or your own bills. When past due invoices pile up, your business can suffer. How Does an Overdue Invoice Affect Your Business? During the COVID crisis, for example, it’s become increasingly common for businesses (even large ones) to take 45 or even 60 days to pay. Not to mention, emergencies happen, and sometimes they leave businesses unable to pay. Chasing down unpaid debts is just one of the many daily tasks that business owners put off when they have work to do for other clients. Let’s not forget that small business owners are super busy. Of course, some business owners are just afraid to come off as aggressive, so they aren’t as persistent as they should be in collecting on their invoices. This is a big problem for new businesses, especially, because many of them spent so much time and energy growing their business that they neglected to build a proper invoice management system. ![]() If you don’t know who owes you money in the first place, you’ll never get paid. There are several different reasons why a company might accumulate unpaid invoices.įirst and foremost, an unorganized accounts receivable system can be a major culprit. Why Do So Many Business Owners Have Unpaid Invoices? The purpose of this article is to share these methods with small business owners so that they get their invoices paid by the due date and maintain healthy cash flow. Many small business owners face cash flow issues due to unpaid invoices.īut this problem isn’t new, and companies have discovered ways to speed up the collection of payments. ![]()
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