So you followed the procedure correctly and the friendly follow-up didn’t work. If you currently don’t have a late fee statement on your invoicing form, think about sending your customers a notice letting them know you’ll be introducing this policy on all future invoices. These will prompt clients to pay sooner, but also help you take care of any financial issues you have at hand. They might be motivated if you include a late payment fee in your invoice. However, not everyone is motivated by the carrot. It’s common to offer a 1-2% discount on the total invoice if clients manage to pay it in full within 10 days. Offer Discounts and Charge Penaltiesīy offering a discount for early payments, you can encourage customers to pay ahead of the due date. Keep in mind that you’ll want to maintain a good working relationship with the client and that one unpaid invoice might only be an oversight. In most cases, that’ll get your invoice paid and everybody wins.Īt this point, there’s no need to make any “past due” remarks or use harsh language. So before you get ornery, send a friendly reminder and a polite follow-up email. A client might be dealing with an emergency or doing business out of town.Ībout 34% of delayed payments occur just because the transaction is pending. Is your address correct? And the payment details?įinally, keep in mind that sometimes unpaid invoices slip through the cracks.Make sure you follow the right procedures for getting paid. When you have overdue invoices, don’t jump to conclusions and start sending threatening emails. Follow the Procedure and Send Friendly Payment Reminders We live in a dynamic world where situations can change rapidly, and sometimes, due to circumstances beyond our control, people or businesses find themselves filing for bankruptcy. However, the discussion of upfront payments can bring certain realities to the fore, such as the difficult subject of financial stability. This is something that is being proven over and over – If someone has a problem with the downpayment, they will likely have problems with future invoices. You can also screen customers by asking for a deposit before you start any work.Ĭustomers who refuse might not be a good fit down the road. If a new client questions your policy, ask them kindly to call any of your clients and ask about your reputation and professionalism. If you have a clean track record and take care of your clients, you’ll earn more rights to take payments upfront. Of course, paying upfront is a two-way street and it’s natural that some clients will be wary. If you have reasons to believe that using an invoice system with a certain client is too risky, you should ask for payment upfront before any work starts. Will you simply send out payment reminders or will you completely stop working on the project until all fees are paid? Bill for Work Upfront Make sure to cover multiple example scenarios and explain what will happen once there is an overdue invoice. If you’re sending business proposals, a great place to discuss this is the terms and conditions section. If anything changes mid-project, be sure to alert the customers in real-time so that you are all on the same page. If your client doesn’t have cash in hand, they can use a credit card. This kind of clarity from the very start helps strengthen customers’ trust and commitment to paying the full amount. Make sure the client is fully aware of the projected costs before you get knees deep in the project.Īlso, take the time to answer any questions regarding paying upfront. When you put everything on the table right away, you will set up payment expectations and establish trust for a lasting customer relationship. Here are 10 strategies for how to collect unpaid invoices! Discuss Costs and Payment Terms Ahead Whether you’re a multi-million dollar business or a marketing agency, setting aside resources to deal with unpaid invoices takes focus from serving other clients.Ī survey by Sage that included more than 3,000 SMBs found that about 30% of businesses experience or expect to experience negative impacts of unpaid invoices.Īt the end of the day, you need money to survive, which means unclogging the cash flow. Collecting unpaid invoices is a necessary chore that most agencies have to face sooner or later.
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