For small business owners, there are few things more aggravating than unpaid and overdue invoices. You’ve performed a service or distributed a product, and expect to be compensated for it; you’ve dutifully provided your customer with an invoice, yet payment is nowhere to be found.
What can you, as a business owner, do to ensure that your invoices are paid in a timely fashion? To be perfectly candid, the best first step is to acknowledge that you really can’t guarantee that your invoices all get paid in a timely manner. There are, however, a few strategies to encourage your customers to do the right thing—and to do it as promptly as possible.
- You can add overdue fees to your invoices. An invoice that isn’t paid within 30 days’ time will have a $15 overdue charge added to it, for instance—with another $15 added the following month. So long as you provide your payment terms to your customers well in advance, rather than spring “surprise” late fees on them, this should be perfectly acceptable, and in some cases is sufficient for getting those invoices to the top of the to-be-paid pile.
- You can provide short payment windows. If you give people four months to pay their invoices, don’t be surprised when they lack a sense of urgency. To get your invoices paid in a more timely fashion, set payment terms of 30 days, or even 15!
- You can talk to your clients. Never underestimate the power of consistent communication. Send an e-mail reminder, or better yet give a follow-up phone call a week or two after the invoice is sent. You can ask if there are any comments or questions about the service you rendered, or inquire as to whether further assistance is needed, and you can also offer a gentle reminder that there is an outstanding balance.
- You can create an invoice that people will take seriously. You can’t just slap down an invoice on a Post-It note! Create something that looks professional, adorned with your business logo. Command respect through your invoicing process.
- You can not let things get out of hand. As soon as an invoice rolls past its due date, make a phone call to the customer and try to resolve the issue. Don’t allow things to go on unpaid for long, and don’t hesitate in taking action. The quicker and more decisively you act, the better chance you have at getting the issue resolved.
Remember: Sending an invoice is only the first step in the process—a process you have to manage through payment, overdue notices, and beyond. For assistance with your invoicing needs, check out the BizXpert, and kick your invoicing process into high gear!