A healthy cash flow is essential for a business to survive. Failing to get paid quickly and regularly for work done for a customer can result in serious cash flow issues and ultimately will affect your long term prospects.
Following on from our credit control basics guide earlier in the month, here are some handy tips on how to get unpaid invoices settled, whilst maintaining a good relationship with your client.
Sending frequent and friendly reminders will maintain your communication and help resolve issues quicker. Phoning the accounts department will also help ensure your invoice remains at the top of the pile to get paid.
If the invoice remains unpaid, further action may need to be taken.
A debt collection agency will take over the chasing of any outstanding invoices on your behalf. Using these agencies will remove you from the process and can help protect your relationship with the client.
Appoint a solicitor
If a client simply refuses to pay, appointing a solicitor may be your next step to take things further. Ensure you appoint a solicitor who specialises in debt recovery. A simple letter from them can be enough to encourage the client to pay up!
Make a claim yourself
The HMCS Money Claim Online Service will allow you to pursue the outstanding invoice yourself through the courts. It’s an inexpensive, fast and straight forward process but has the right amount of authority to make clients pay up quickly.
Avoiding the situation
To avoid having to chase outstanding invoices, there are things you can do to avoid late payments in the first instance.
Agree terms at the offset
Agreeing the payment terms early and therefore managing the client’s expectation of payment can prevent issues further down the line.
As soon as the work is done, raise an invoice. Ensure it includes late payment interest details and ensure these are applied if the invoice is not settled on time.
A good relationship with your client can be vital in terms of getting paid on time. A friendly reminder prior to the invoice due date may be all it takes for the payment to be made to you.