Dealing with unpaid invoices and late payments can feel like a little bit of minefield at times. You have the need to push clients and prompt payments, at the same time as wanting to maintain a good working relationship. After all, you most likely want to continue doing business with them but at the same time, you do need to be paid. With freelancing, running a small business and contracting getting paid can sometimes become a hassle. Not getting paid at all is even worst.
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Let’s have a closer look at some of the things you could consider when chasing payment or invoice :
Business Killer
Having late payments or unpaid invoice can spell disaster for small businesses, contractors and freelancers. Often they’re relying on the payments to fund their next ventures or to just live off. This means it’s imperative to get your invoices paid on time and in full where possible. Another problem that arises from missed payments is the time that it takes to chase the clients for the payment. It can take up solid chunks of time just to sit and chase money that should be in the business. This time could be and should be used for other areas of focus. Having missed or unpaid invoices can lead to serious cash flow problems.
Set A Credit Period
The credit period is what begins when the work has been completed or when the customer receives the notice that payment is due. Whichever is the latest is usually the one that is used. Some companies pay their invoices on a set date each month such as the end of the month, or last working day. This means that it is advisable to speak to them regarding payment dates so you know when to expect the payments and what payment time you should be offering them. If you invoice on the first day of the month, you will know that you are expecting to wait until the end of the month. When you don’t have a preset agreement in place, the Gov.uk website states that the customer must pay you within 30 days of receiving your invoice, goods or service.
Think About The Reasons It’s Been Left Unpaid
There certainly is a lot of reasons that an invoice might not be paid, it’s up to you to decide whether they’re genuine or not. At the end of the day, it boils down to poor credit management. Regardless of what the reason is it also has an effect on your finances, you can make allowances but as soon as feel like it not going to be paid it may be time to look at alternative methods of retrieval.
Should You Use Debt Recovery?
Another way to deal with late payments and unpaid invoices is to use debt recovery agencies and Debt Recovery Solicitors. A decent debt collection agency will handle the process of sorting your unpaid invoices delicately, which will help prevent you from losing future custom with the client. If this doesn’t work then the solicitor route may be the best option.
These are just a few of the considerations you should make when chasing invoices and late payments. Is there anything else that you can share in the comments below?
