Keeping on top of your payments and invoices can feel like a job in itself, but by following a few easy, logical steps you can make sure your clients have received your invoices, and leave them with no wriggle room to get out of paying up. Here’s our suggested approach to invoicing, and why it works to get as much of your money as quickly as possible, while chasing up non-paying customers in the appropriate way.
For this piece we will assume that your business operates on “standard” 30 day credit terms and that the invoice has been issued.
Call the client.
After the invoice has been issued, but before the due date.
The objective of this call is to confirm that the invoice has been received and that it is due to be paid on or before the due date. Calling the client serves two purposes.
It gives you advance notice of any issue or queries that may delay payment of your invoice. This will give you the time to address any issues prior to the due date.
The call is the perfect opportunity to get feedback from the client on the work provided and sound out the potential of any further work.
Send a statement.
On the due date.
Sending a statement on the invoice due date is a quick and easy way of reminding the client that the invoice is still outstanding, without actually having to “chase” the money.
Many companies automatically send out statements at the end of every month so it is extremely unlikely the client will have any objections when they receive one.
Email the client with a brief but courteous message regarding the outstanding invoice.
Approximately seven days past the due date.
Nine out of ten times late payment is simply due to an administration failure and is unlikely to be indicative of insolvency on the part of the client. As such it is important to stay calm in your manner and prose and limit yourself to finding out exactly when the overdue invoice will be paid.
Call the client (again)
Roughly 14 days past the due date.
It is vitally important to maintain communication with any late paying customer to ensure your invoice is settled as quickly as possible. Out of sight is often out of mind and freelancers who fail to chase overdue invoices can often find they are at the bottom of the list for payment.
If no genuine reason for non-payment exists get a firm date for payment and ensure that you make a note of any promises.
Stay in regular contact with the client
Day 21 overdue onwards
If a client has not paid in the three weeks since the due date, chances are they are deliberately delaying payment. As a freelancer it is up to you to ensure that your outstanding invoice is never far from their mind.
By staying in regular contact you can ensure that the client cannot simply sweep your claim under the carpet and forget about it. Remember, business is business and your company is doing nothing wrong in seeking payment for goods or services provided.
30 days overdue or more
That may sound dramatic but it’s true, every day in the UK otherwise profitable and successful businesses are forced to close due to cashflow issues caused by non-payment of invoices. If a single bad debt can kill an SME what would be the impact on your professional finances as a freelancer?
Every day your invoice remains unpaid increases the risk that it will eventually have to be written off as a bad debt. It is imperative that you take action to recover what is owed as soon as possible.
Consider the addition of Late Payment Costs & Interest under UK late payment legislation (more info on this can be found at www.payontime.co.uk). Alternatively get some help from a reputable debt collection agency or issue legal proceedings in your local county court or via www.moneyclaim.gov.uk.
Photo by Tiffany Terry
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