Five Tips for You to Deal with Overdue Invoices

 In Invoices

Any business that wants to grow must be able to generate enough cash flows for its working capital needs. Businesses pay bills everyday of the week. From electricity bills to staff salaries and wages and overhead for executing projects, there are a lot of costs a firm generate. All of these costs and the working capital of a firm are sourced from the proceeds that come from the productive activities of the firm. A firm who can’t meet up with its working capital needs would surely pack up. This means that for a business to continue working, it is important for clients to pay their invoices promptly. When clients are not paying their invoices promptly, it leads to a problem for the firm. To prevent cash flow problems, a business must learn how to deal with clients who are not paying their bills. Here are five tips to deal with overdue invoices.

  1. Send in Reminders

When a client has defaulted in paying a due invoice, send in reminders to such clients to let them know their bills haven’t been paid and that you are waiting for the bills to be paid as it is important to your business.

  1. Ask for Advance Payments

You might be well advised to ask for advance payment before you start some projects. This should even be utilized more if you are dealing with a client that has a past record of not paying their invoices as and when due. You can ask clients to pay a certain percentage of their bills before starting the project. This would allow you to reduce the chances of having an unpaid invoice in the future.

  1. Charge Interest on Late Payments

Your invoices should have terms that charge interest on clients that make late payments. You shouldn’t at anytime encourage late payments as it is what generally leads to overdue and unpaid invoices. Stating the interest in plain terms will make clients pay on time as they wouldn’t want to incur additional costs.

  1. Send Overdue Invoice

If a client has failed to pay your invoices you should consider resending the same invoice to them at intervals until they pay up. You wouldn’t want them to give you an excuse like I’ve totally forgotten I have an overdue invoice, or I can’t find the invoice in my mailbox. Until you have gotten your pay from such client, make sure you resend the said invoice from time to time as a reminder.

  1. Abandon Protocols and be Stern on Defaulting Clients

There are people who won’t get in line until they have been thoroughly drilled. Abandon the protocol of sending gentle reminder to perpetual defaulters and let them know how you are disappointed in their actions of not paying up their bills after you have worked for the money. Let them know their actions are unjustifiable and shameful. It is things like this that would be a wake-up call for some people and prompt them to finally pay their overdue invoices.

In other to keep your business afloat and running, adopt these winning tips to deal with overdue invoices and defaulting clients.

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