Tips on how to get your invoices paid quicker:
More than half small businesses receive their invoice payments late, however it's not necessary for it to stay this way. You're able to take off days or even weeks from your late payments if you invoice correctly.
We've found our bookkeeping clients, that follow these rules, have successful businesses.
1. Create invoices as soon as you can
Your client is unable to pay unless you have created an invoice and sent it to them. The faster you send it over, the quicker you are likely to receive the payment. Clients prefer to make payments when they have an actual invoice in hand and have also received the service they are due to pay for. Once you have delivered both it is unlikely that payments will be delayed.
The invoices can even be sent through your phone by using online accounting software
2. Deliver clear invoices
Make sure the invoice is nice and clear. There must be no confusion on the amount owed, the date of delivery and there must also be a description of the service given. Just like you have many clients, your client has made many purchases and they need to be given a reminder on what you're invoicing them for. Make sure they do not need to contact you for more information regarding the payment because this could further delay the payment.
3. Ask for quicker payments
Nowadays it is more common for invoices to be sent on a weekly basis, while previously it was more common to send out payments on a monthly basis. This has changed now and we suggest you use the same approach send out weekly invoices when you can, this will lead to prompt payments.
4. Enforce payments on time
It is common to charge "late fees” for payments not made on time. You can try this policy too, but you have to make sure your client is aware of these terms first. It must be stated prominently on the invoice.
You could add a line in the invoice stating “late fees will be charged at 10% of the amount owed". You can even offer a reward for clients that regularly pay on time such as a discount on their next payment, also make sure to add this to your invoice template as well.
5. Make it easy to make payments
Customers are likely to make their payments fast if it is convenient for them; for example bank payments via internet banking or even via credit card. Make sure you offer them more than one method of payment so they can choose which one suits them best.
6. Follow up outstanding invoices
So, you’ve tried it all? Sent out invoices, set fines. Still payments are late? Go ahead, make a follow up call or email. Chase your payments as soon as the invoice becomes overdue.
Online invoices are even more convenient. Online invoices allow you to see whether they have been checked by the other person or not and that’s why they are recommended. Xero and also MYOB both support these options
In summary:
You've done the hard work, delivered a great product or service. It's only fair that you get paid on-time. Follow the above, and you've done all the right things to minimise delays
