If your small business is predominantly paid through invoices that are sent to clients upon completion of the work, unpaid invoices can be a serious headache. Although you would expect most decent people to pay invoices as soon as they are due, you can’t guarantee that this will always be the case, and sometimes, invoices can go unpaid for weeks or even months. This could be due to clients simply trying to get away without paying or in some cases, it’s less sinister and they just need a reminder because paying slipped their mind. In either case, there are several things that you can do to avoid the financial trouble of unpaid invoices and make sure that your business is paid on time, every time.
Shorter Due Dates:
The longer you leave a due date from the date that the invoice is sent, the more likely it is that your client might forget that it is due. If you’re giving your client weeks or months to make the payment after receiving the invoice, this might seem like a nice thing to do – but in reality, it can lead to more problems since a lot can happen in between, and your client could easily forget what day they are expected to pay when so much time has passed. Instead, make invoices due immediately or give your clients no more than 15-30 days to make the payment.
Make Paying Easy:
Making payments easy for your clients will encourage them to make the payment there and then, rather than having to wait until they are able to. Only accepting checks, for example, is a pretty outdated way of doing things these days and super inconvenient for the client, who’ll not only need to take the time out to write the check but also mail or drop it off to you. Using invoicing software that provides easy links for the client to make the payment instantly online using their credit or debit card is the way forward.
Send Reminders:
Life happens and often, your unpaid invoice might simply be down to the fact that your client has forgotten about it. Allow for a couple of days grace before you send your client a reminder to let them know that their invoice is still unpaid, and provide a link that they can use straight from the reminder email to pay it. Consider sending reminders by SMS too, since this is more likely to be seen instantly.
Use Invoice Financing:
Finally, invoice financing is a service that can help you get the money that you are owed from seriously overdue invoices. Selling your unpaid invoice funds to an invoice financing or invoice factoring company means that you get the money that you need in your account minus their fee, and the unpaid invoices are no longer your problem.
Most good clients will pay invoices on time, but there’s no guarantee you are always going to get paid when requested. Keep these tips in mind to make it easier for clients to make timely payments once an invoice is sent.
