You might have a successful, growing business, but without money coming in on time, you won’t be able to continue operating. Getting invoices out regularly and getting them paid on time helps to keep the cash flowing. It’s always smart to have a set policy when dealing with collections, whether you’re sending invoices out yourself or using an accounting system that keeps track of everything for you.
The National Federation of Independent Business (NFIB) says one of the recurring questions it gets from small business owners is: “What can I do when my customer is late in paying their bill?” Below are 5 tips for dealing with unpaid invoices and turning them into paid ones.
1. First, be sure to http://gamesarentnumbers.com/you-are-a-game-but-can-you-become-a-number/13/ send the invoice out on time, that it went to the right person and is for the right amount. If there was an error on your part, call the customer to explain and resend the correct invoice. You may also want to inquire if the customer is unhappy with your product or service or if there is some other issue holding up payment.
2. You should anchor have a clear due date marked on your invoice and language that explains what will happen if an invoice becomes past due. You may want to give customers a one- or two-week grace period before they start to incur interest or extra fees.
3. An http://fleurdelissalon.net/contactos.aspx email reminder close to the due date can help, and the best action to take once an invoice is past due is another soft reminder by email. Reattach the invoice and mention your grace period if you have one, but always remain professional.
4. Give customers more than one way to pay and let them know their options on the invoice. Do you accept checks, credit cards, PayPal, Apple Pay or anything else?
5. If the customer still hasn’t paid, you probably need to make a firm phone call to discuss payment options and let them know what the consequences will be if the invoice remains unpaid. Charging a late payment fee, turning the customer over to a collection agency or getting your attorney to send them a letter are all options for dealing with long overdue invoices. The site Small Business Bonfire suggests getting creative and sending couriers or executives themselves out in person to collect.
The NFIB advises consulting an attorney about any applicable local, state or business specific limits that can be charged for late payments. States also have statutes of limitation on debt collection. An attorney can help ensure that your business contracts are as air tight as possible and assist you in implementing other provisions to encourage prompt payment, such as requiring customers to cover legal expenses due to debt collection, offering a discount for early payments or asking some clients to pay in advance.
MidSouth Bank offers many services, to help grow your small business. Learn more
*Sharing information from an outside source does not constitute an endorsement of the source. Some linked sites are not controlled by MidSouth Bank