Prevent unpaid invoices without damaging relationships
Unpaid invoices
Small Business Commissioner Paul Uppal recently warned that too many small businesses are tolerating bad payment practices just to be associated with large companies. While it might seem good for business to have big brands listed as clients, it’s always risky to work with late payers. Fortunately, there are ways to address the issue without losing prestige clients.
Set clear terms
It’s normal to negotiate with new clients, especially if they represent big business, but that shouldn't mean you have to sacrifice your rights. Make sure your payment terms clearly incentivise prompt payment and penalise delays.
You can do this by including clauses that offer discounts when invoices are paid within a stated time period – a week, for example. At the same time, you should reference your legal right to charge interest on payments made over 30 or 60 days after invoicing. It’s also important to be clear that, in the event of an unpaid invoice, legal action could follow.
Stay on top of admin
Debts only count as ‘late payments’ 30 days after the invoice was sent, so it’s vital that you send invoices promptly. Automated invoicing and accounting software can help with this. Likewise, issuing polite reminders or making follow-up calls to ensure the invoice was received can ensure that your client’s accounting department is aware of the bill and is preparing to pay.
Large, bureaucratic organisations may dispute costs and expenses included on your invoice. Make sure your records include details of all spending – such as receipts – so that you can quickly clear up any queries.
React quickly to concerns
If a client continues to push back on an invoice, whether it’s because of questions about the service or about the costs on the invoice, take the time to hear them out. Trying to find an amicable solution may be the fastest way to progress. A professional mediator could also prove useful at this point.
Once you’ve exhausted all avenues, it’s time to consider partnering with an Enforcement Agent, such as Dukes Bailiffs. A good agency will endeavour to set up fair, manageable payment plans before looking at other options available to recover unpaid invoices in accordance with your rights.
If you’re faced with an unpaid invoice, contact Dukes to find out how we can help.
