Do you own or manage a small business? There’s nothing easy about keeping a startup profitable or running efficiently. In fact, this is one of the biggest challenges you’ll ever face. It’s especially difficult when there’s so much competition on the market.
When you manage a #company of any size, you have to make sure that your #clients pay on time. Share on XThis means you’ll need to find ways to collect on invoices that are overdue. Fortunately, this article can help. Here we take a look at tips for collecting payment on unpaid invoices so you can keep the cash flow coming in. Keep reading to learn more.
Develop a Clear Follow-Up Procedure
When you run a business with a billing department, it’s essential to have a clear and consistent procedure for how to follow up on an unpaid invoice. Having a follow-up procedure will make your life easier and help past-due clients understand that you expect invoice payment as soon as possible.
The key is to structure your protocol so that it’s easy to understand and provides clients with several opportunities to become current with their bills before cutting them off from the products or services they desire from your company.
Be Polite
Always be polite when a client won’t pay for service. Being rude or overly aggressive might make things worse and cause them to totally ignore your ongoing requests for payment.
Give Discounts for Paying On Time
One of the most effective ways to encourage payment is to offer discounts for paying on time. It’s important to be clear about the discount so they will take advantage of it rather than delay payment. Thus you should include the discount amount beside the due date.
Send a Series of Friendly Reminder Emails
When a client is late with a payment, start by sending a reminder within a couple of weeks. Then follow up with another reminder each week until it becomes clear that the reminders are being ignored.
Now it’s time to place a reminder phone call to encourage immediate payment for the invoice amount. Be sure to check out this resource that will help you generate an invoice for your small business.
Charge Late Payment Fees
Make it clear that fees will be charged on overdue invoices. These fees should increase with each reminder, and don’t be afraid to eventually cut them off unless their account is made current, including all late payment fees.
A Guide to Collecting On Unpaid Invoices
Being an entrepreneur can be exciting, but it’s also challenging to keep a small business afloat when your incoming cash flow starts to slow down. That’s why it’s so important to reduce the number of unpaid invoices remaining on your books at any given time.