Struggling because clients are failing to pay on time?

Did you know that half of all invoices are paid late – which can quite literally be a nightmare for businesses, having a sizeable impact on cash flow.  Getting paid on time is vital, and yet it can be a crippling drain on resources. There are lots of tools to help automate the process, but ultimately, someone in your organisation should also be responsible for getting invoices paid on time because occasionally it requires manual intervention.

Sometimes, your clients might be genuinely struggling for money and simply won’t have the money to pay you. Firstly, arrange a meeting to discuss the situation, and if possible, stop the work you are doing for them until they pay the overdue amount. At least this limits the work that may never get paid for.

More often than not though, your invoice won’t have been paid on time because it hasn’t been given the right priority by your client.

Here are 5 ways to ensure you get paid on time, every time:

  1. Collate all necessary invoice information from the client:
    Many companies need PO references, due dates, references and service descriptions included in an invoice in order to process it. Ensure you capture this information correctly and save it safely – online bookkeeping tools are set up so you only have to key this data once. 
  2. Have a robust sales invoice process in place:
    Make sure you have a robust, ideally automated, process for raising sales invoices at the start/end of a project, or monthly; make sure they are raised correctly the first time with all the relevant information to prevent any delays in payment from your client
  3. Ensure you have a clear audit trail:
    Having a clear audit trail makes light work of phrases such as ‘I haven’t had sight of this invoice’ or ‘This invoice has been paid’. However, it’s always worth ensuring your payments have been reconciled correctly before contacting the client with your evidence of non-payment.
  4. Implement a chasing process:
    Show your clients that you have a thorough system when it comes to credit control by implementing an automated process that chases every overdue invoice. This will also help flush out any invoices that might be ‘in dispute’.
  5. Introduce a fixed interest fee for common late payers:
    This tactic is really a last resort, as enforcing interest for late payers could be at the expense of the client relationship – and clients are often hard won.  But it might be a useful procedure for particularly problematic clients.

We hope you’re never in a situation where you get no response from your client when you chase payment. However, there are still things you can do to try and recover what your due, including writing a Letter Before Action and submitting an Online Claim.

If you’d like any advice about getting paid on time, recovering what you’re due, or client liquidation – get in touch with us as soon as possible and we will do everything in our power to help.

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