How can you prevent a late payment of invoice from your client?
To run a successful and profitable company, it is important to ensure that you get paid promptly by your clients in order to keep your cash flow healthy, and ensure your business remains fluid. Unfortunately this is not always possible and we see countless examples of where businesses have fallen foul to unpaid invoices and broken promises. Trying to prevent this can involve a lot of preparation work before commencing the relationship, but will prove invaluable in safeguarding the longevity of your company.
Here are some Tips for reducing the risk of unpaid invoices to your company: –
- Find out about your new client’s reputation and run a credit check before adding them to your books
- Review your Contract and ensure that it states the payment Terms and Conditions clearly. The Terms and Conditions of business should confirm when payment is due and, when it overdue and the costs and interest to be added if applicable.
- Before starting work, if possible request payment upfront or at least a deposit towards the work.
- Ensure to invoice immediately after finishing the work and also include information on statutory late payment interest. Within the invoice, ensure that your payment details are contained.
- Schedule polite reminders regarding payment.
- Try to maintain a good relationship with the clients appointed credit control person. This can be invaluable when chasing payments
Staying in regular contact with your client in regards to invoices will help you to gain more understanding of the client’s payment intentions.
Clients who fail to make these payments on time continuously are not likely to be valuable assets to your company. Monitoring these chronic late payers are a must. By keeping an eye on this you’ll be able to identify clients that frequently pay late and chase for payment as soon as the payment becomes overdue.
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