Pinal Bhalodia
Let’s be honest. Your business is not going to grow if your customers are not paying you on time, as they should in reality. Small businesses often come across cash flow crunches owing to the unpaid or partially paid invoices that could be easily solved if the clients would have been paying their invoices in a timely fashion. If you procrastinate the collection of unpaid invoices by giving priority to some other task, let me tell you, you are doing a very costly mistake. However, don’t you worry as we have some of the ways by which you can work around this issue? Let’s have a look.
Check the Payment History of the Client
Before providing the client with your payment terms, get a check done on their commercial credit. This enables you to have knowledge about your client’s payment history with the other marketers. These commercial credit reports can be bought easily from various sources. If the client has a good record when it comes to the past payments, then the chances are good that he will pay your invoices on time. Therefore, giving them credit will not put you in jeopardy in the long run. However, if the payment history seems to be shady, then we would advise you to cut ties with this client as soon as possible.
Don’t Forget to Sign a Contract
Not signing a contract is one of the biggest mistakes that you can commit while offering the payment terms. Every sale that you do, make sure it is covered by a contract. All the important factors such as deliverables, payment expectations, time frames for paying the invoice, how disputes will be handled, etc. should be clearly mentioned in the contact after a mutual agreement by both the parties. In the absence of a contract, you will not have anything documented that outlines when the payment is to be made and what will be the action in case the pending bills are not cleared.
Get A Signed Delivery Acceptance Letter
This is yet another way by which, you can improve your invoice collection process. Get a delivery acceptance letter signed by your client whenever you successfully deliver your services or products to them. Once the required work has been completed, it should be duly signed by the client. When signed by the client, this acceptance letter ensures that the client is satisfied with your work and you will not experience any issues at the time of payment. On the contrary, if the client is unwilling to do so, take it as a red flag.
Automate Your Billing Process
One of the best ways to keep a tab on partially or unpaid invoices is automating it with the help of invoicing software. The invoicing software enables the businesses to create, manage, and send invoices to their clients without any hassles. Right from generating the invoice to time tracking, the software makes sure that everything is done without any delay and errors. One of the best invoicing software that will make your invoice collection process extremely uncomplicated is Cloudbooks app. This is a web-based online invoicing software that ensures that small businesses and freelancers get their invoices paid in a timely manner and that too without any hassles.
Follow-Up you’re Clients
If you have followed the above-mentioned ways, we believe that you will not come across a situation where in your invoices will be left unpaid. However, follow-up with your clients on a regular basis to ensure that there is no communication barrier between both the parties. Verify that you client has received the invoice that you have sent them. After 5 days from the day the invoice is sent, make sure to get in touch with the client to see if there are any issues.
Give a Last Ultimatum
If the client is missing the payment dates and is not responding to your mails and calls, then there is definitely something fishy going on. Send a last written statement to the client to make things clear from your end. Amidst all this, make sure that you remain courteous and professional towards your client. Even if they are not making the payments, treat them professionally.
Handle Disputes Professionally
This is the last resort that you should go for in case everything else fails. While most of the small businesses do not waste their time and money in filing lawsuits against the clients, if the client owes you a large sum, it is better to file a case against it. If you decide to pursue a legal action against the client, take help from an attorney.
We believe that the aforementioned seven ways will surely turn your partially or unpaid invoices into cash when the pending payments are making it difficult for you to meet your capital requisites.
