In this article we review the basic steps to follow to collect outstanding invoices.
Remember that having a comprehensive accounting and billing solution will help you achieve this.
Having to chase after clients to get them to pay their invoices is something that, unfortunately, the financial departments of many companies suffer from on a regular basis.
“At the end of the day, it’s money they owe you,” says Paul Donno, a chartered accountant and director of 1 Accounts Online Ltd. “They’ve already received your service or product; if they’re happy and everything is in order, there’s no reason not to pay you.”
For Donno, “the way I see it, you don’t just walk into a grocery store and say, ‘ I’m going to take this cart full of food and I might pay you back in a couple of months ,’ so I don’t french email list know why that should be the case for small businesses.”
However, it is not usually necessary to take drastic measures with clients. If you follow these simple tips, you can speed up the collection of those outstanding invoices.
1. Check that the invoice includes all the necessary information
“Sometimes an invoice can contain too much information ,” Donno says, “but you want to make sure the essential information is there.”
This includes the amount of VAT (if applicable), the correct price, quantity and description, as well as payment terms and, of course, the full name and address of the supplier and the customer.
“If your client needs a purchase order or order reference, be sure to include that as well,” Donno adds. “And don’t forget to double-check that everything is in order.”
Being attentive to details will mean that the customer will have fewer reasons to contact you again and delay payment.
2. Include your full bank details on all invoices and statements
"Make it very, very clear when you want to be paid," Donno says.
Include information on the invoice such as your international bank account number (IBAN) and your bank identification number (BIC). If you have other payment options or methods, include them as well, such as through PayPal (provide your email address), or by phone with a credit card, etc.
"Personally, I wouldn't give the option of sending a check," says Donno. "In this day and age, they are a real hassle for banks, and they are also expensive."
Try to make it as easy as possible for your customers to pay. If someone has to interrupt the payment process to look up their bank details, they are less likely to complete the payment.
It will also be essential to establish payment terms on invoices from the beginning and make sure to choose those that fit the business model.
3. Pick up the phone and talk to your customers as soon as possible
For larger invoices, make a courtesy call a week after you send the invoice to make sure it has been received correctly and that everything is correct. All sales invoices count and should be paid on time , but larger invoices require more personal follow-up.
“Is it possible to talk too much to clients?” Donno says. “Not if they owe you money! Find the person who is responsible for paying the bills. If you bill them regularly, you’ll build a good relationship. They know you’ll be there, and over time, they’ll know what you expect from them, which will lead to timely payments.”