At CollectIT we often see invoices which lack information, such as incorrect entities that have been invoiced, no addresses on the invoice, no due date for payment etc. Do you want to get paid in a timely manner? Read on for useful tips or watch this video.
1. Provide terms of trade to your client
Having well spelt out terms of trade with your client before work is carried out gives you a contractual agreement which then governs the contractual relationship between you. Without them it is impossible to impose terms such as interest and the recovery of your costs in the event that your customer does not pay you.
2. Have a professional looking invoice
Handwritten invoices are easy to ignore, especially if the handwriting is difficult to read. It can also suggest to your clients, that you don’t have a team of smart business advisors who are going to leap right onto slow payers or non-payers.
3. Ensure the information is correct
Putting an incorrect figure on your invoice is going to delay your payment. If the amount you have listed is too high your customer won’t pay you and you will have to start again with a new invoice. If it’s too low, the customer will be delighted, possibly pay you straight away, and then best of luck chasing them for the balance. If you’ve put the wrong bank account details it could take weeks to sort that out with the bank. Ensure the entity you are invoicing is correct - whether it is a company, trust or individual - make sure this is correct on the invoice.
4. Ensure all data is there
If any data is missing, such as bank account details, an address, an order number – how is your customer going to pay you? The same applies if you have omitted to put on the charge for additional products or services. You can send an updated invoice but you will need to start all over again with payments terms, slowing down the process of getting paid. Ensure that you have stated clearly on your invoice, the date payment is due.
5. Be Prompt
Every day you delay sending out the invoice, is prolonging the day you get paid. Send invoices as soon as the job is finished or as a progress payment if the job is lengthy. Emailing is the most efficient and cost effective way to send your invoices.
6. Make it easy to pay
The more options you give your customer to pay, the easier it is for them. The majority of bill payments are now made electronically. If your client is experiencing difficulty paying the full amount work out a payment plan that will work for both parties. It’s better to be paid slowly than not at all.
7. Chase when it’s overdue
When a client is overdue with their payment, it is up to you to pursue the matter and ask for the payment to be made for the service/product you have provided. This follow up needs to be carried out in a timely manner ie. within a few days of it being due. If your accounting software enables you to set up automated reminders to be emailed to your customers when the invoice is overdue – this is worth setting up. Don’t be slow to ask for professional help on the matter of unpaid invoices. Sometimes the sheer fact that you have escalated the case, shows the debtor you are serious about being paid for the work you have done.
If you would like to discuss how CollectIT can assist with improving your cash flow by getting your clients paying on time please contact our office today 07 834 9111 or firstname.lastname@example.org