A new study declares that one-half of the invoices issued by U.S. businesses become overdue. Reduced cash flows, economic struggles, and other complications are exasperating the problem.
If you are facing outstanding invoices, do not let them pile up without acting. There are tried-and-true methods of how to get paid. The faster you act, the chances are better that you will be paid.
For step-by-step advice, keep reading and take notes.
Write an Email or Letter Requesting Payment
When a customer has past due invoices, this is what you must do first. This is the simplest first step to take, too. Begin kindly when you send the request.
Include a polite greeting, give the invoice number or numbers, state the date it was due, and finally, ask when you will receive their payment. Keep your letter short. Any other details will be on the past-due invoices you sent already.
Send the Overdue Invoice
Overdue invoices take the original invoice and put a stamp on it that says overdue. You could also just include the original invoice with the email or letter you send requesting payment from the customer on the unpaid invoices.
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You May Need to Send a Statement of Accounts
This would show all outstanding invoices one customer has with your organization. If you have a customer with a few past due invoices, it is best to summarize them in one statement of accounts document. When you send this to the customer, follow up with a call too.
Making the Uncomfortable Call
Organizations often find better recovery results when they call their late payers. They could screen your call and not answer, but once you can get a person live on a call, it is difficult to have them ignore your inquiry. There is no need to say a lot.
All you want to do is identify the past due balances, inquire about when payment is coming, and then wait for an answer.
Charge a Fee for Late Payments
While you can tack on a fee for late payments and demand payment for them too, you cannot do this blindly. It must be expressly written in your payment terms upfront. Before you supply anything to a customer, it is a good practice to have the person sign an agreement.
Cut Off Services or Goods Until You Have Payment
If the outstanding invoices are piling up, why continue to do business when you are not getting paid for it? Do not put your business in the red. Stop fulfilling orders, at least until the customer makes payment.
How to Get Paid on Outstanding Invoices
Outstanding invoices are frustrating but don’t give up. Act quick. Even with an uncertain economic climate, the faster you follow up and communicate professionally, the higher your chances are for payment.
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