Regardless of the size of your business, having unpaid invoices can be frustrating. Unpaid invoices can pose a problem for the cash flow of your business and make it difficult to meet your business needs or take advantages of new opportunities.
Collecting unpaid invoices is a top priority for any business. Today we are going to discuss some ways to deal with them, so your cash flow is not affected.
It may be tricky to get in touch with a customer who has an unpaid invoice because you don’t want to be too demanding but it is something that you need to have to keep your business running.
It is important to keep track of when the invoice was issued to see how long it has been since they have paid. Do not jump to conclusions and come off as threatening. Jumping to conclusions can be a mistake especially if the fault for the unpaid invoice was on your end. If it is way overdue, contact the customer and request an update on the payment. Be sure to be polite when you follow up but also firm and see if they can provide you with an explanation on why it is late.
It is possible that a customer simply forgot so sending a polite note through email or a “just checking in” phone call will get you the answer you are looking for.
If the friendly reminder does not work, submit a statement later and attach it to an email kindly reminding the client that the payment is now due. Ensure the tone is warm and friendly yet firm so you can get paid. Otherwise, being unprofessional can hurt your business in the long run. If the contract states there is a penalty such as a late fee or an interest charge, make sure the client knows that is going to begin accumulating.
Before getting involved with a collections agency to get paid, there are a few things you can do first.
When you have unpaid invoices, you need to think about how you are going to get the cash to keep your business running smoothly. Seeking business financing may be the solution when clients are not making their payments. Some of the loan options you can choose from are term loans, merchant cash advances, and invoice financing. To choose the right type of financing, you will need to determine what your cash flow situation looks like and how much money you will need to borrow.
Although you cannot completely rule out customers not paying on time, there are some steps you can take to limit the problem.
There are many reasons to why a client may be late in paying you, so it is important to not jump to conclusions and be polite when following up. Make sure that any contracts moving forward outline the exact terms on when the payment is expected and what the penalties are for paying late to avoid any payment problems in the future.