6 Tips To Deal With Late Invoice Payments

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Fretty Francis

Senior editor

Parul Saxena

Chief editor

Last updated: May 21, 2021

You have finished your work and sent the invoices for the same. Weeks pass by, so do the deadline, but you don’t get any revert. Here comes the task that jangles the nerve of many business owners, i.e. chasing the clients for the invoices. Sending mails, reminders, dropping texts could be very overbearing for oneself. If you have to do it at regular intervals, then the tasks become mundane and cumbersome.

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But you should be well versed with the idea that late invoice is an unending chapter of business. You have dutifully done your job and entitled to get paid for it. But even if you hesitate or get annoyed from always calling in for invoices, here are some ways that can help you to avoid awkward interplays.

Ways To Deal With Late Invoice Payments

1. Know Who You are Dealing with.

It could take years to build something but only a day to lose it. In business, you must maintain a good relationship with your clients or associates. Subsequently, it will make sure or easier to sort any invoice overdue for payments. But channeling the frustration on the affiliate of other organizations might sour the relationship, and chances are you may lose them to your competitor. Just make sure that your exasperation of late invoice payment does not hinder the bond you share with your clients. In business, you can’t afford losing clients for posting late invoices. 

2. Don’t be Reluctant.

Firstly, remember that you have done your work resolutely and productively to meet the deadline set by your client. You were prompt and precise in the task that they assigned you. So it’s your moral authority to ask them for the services rendered. If you don’t get paid on time, you won’t be able to pay your bills. Thereby, you should stop hanging back and instead ask for what is rightfully yours. Because asking for something that you entitled to, is not erroneous on any grounds. So next time if any invoice is overdue for payment, don’t hesitate to ask and be polite and prudent in your approach.  

 3. Set Certain Payment Terms and Conditions in Advance.

Many marketers rely on agreeing on terms of the invoicing ahead of time. Most small business owners establish specific invoicing protocols with their clients beforehand so that they maintain adequate cash flow. It will also eliminate any discomfort caused further down the line. Most businesses demand the half amount of the total payment deposited in advance so that they have insurance behind them before initiating with any work or project. It will ensure that there is sufficient amount to start with your work, even if the invoice is overdue for payments or companies will be posting late invoices.

4. Prompt Invoicing.

The faster the accounts department generates invoices; the sooner one can receive the payment. As obvious as this could be, many companies perform this work in batches, and it might take them weeks or more to invoice to their customers. Invoicing software and accounting software could play a significant role in streamlining this process. Evaluating the total amount for utilities, choosing the invoice template, generating a detailed bill and report for every additional charge levied, and many more are the functionalities performed by the software. It will simplify and accelerate the payment and billing procedures and also reduce incidences of errors. 

5. Immediate Chasing of Payment If Invoice is Overdue for Payment.

You have to get paid for the services and products you have proffered. So make sure that you respond quickly and efficiently if a payment becomes overdue. Remember, the lenient approach at the collection and enforcement of the payment can overwhelm your relationship with the client. So be sure that you are considerate with your late invoice payment terms. Invoicing errors often contribute to long payment cycles. Analyzing and rectifying such errors can provide momentum in the payment procedure.

6. Interest on Posting Late Invoices.

Some enterprises levy an extra charge or fee for posting late invoices after some specified amount of time. If the final invoice payment is not paid within that specified period, then an additional fee is charged. It’s really up to you how you set your terms. It will undoubtedly reduce late invoice payments, but always remember that great client relationships are built on trust. You have to be sure whether it’s worth to charge interest before you’ve even had the opportunity to prove your worth.

Conclusion

Most importantly, you are the master of your craft. With your disposition and intellect, you can perceive what’s best for your business. Beyond everything, consider to stay focused on your work, remain calm and composed, keep taking follow-ups, and still, if there is no action, then use your discretion. Always keep reminding yourself that patience is the virtue. Above all, businesses can only benefit from being organized and having a better relationship with clients.

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Fretty Francis is a digital marketing and content strategist at SoftwareSuggest, a software recommendation platform. She's passionate about analytics, conversion rate optimization and ice-cream.

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