You wouldn’t ask your local supermarket to invoice you for the weekly shop, so why shouldn’t you get paid on time for the product or service your own business provides? Of course, every industry or sector has its own rules regarding time frames for payment, and you need to know yours to avoid annoying customers or clients. However, here are some good tips for staying on top of your invoices and making sure you get what’s owing.
Make a Contract…and Stick to It
Clients and customers are less likely to mess you around if everyone understands the ground rules. Draw up a contract establishing what’s expected from both parties, a reasonable time frame for delivery and payment, and penalties for non-payment. Once the contract has been signed, be sure to keep to it. Your clients will soon get the message and learn to respect the rules.
Stay on Top of Your Invoices
Nobody likes invoicing, but it’s important to ensure your invoices are going out as promptly as possible. Remember that the sooner you send out an invoice, the sooner you’ll get paid. Ideally, you should try to invoice at the same time as, or before, delivery of your product or service. Set up automatic reminders to follow not only when an invoice was issued but when payment is due. That way, you’ll be able to follow up on late payments firmly and promptly too.
Get Details Right the First Time
Inaccurate invoicing is probably the biggest reason for delays in payment, so make sure you double-check the details before sending any invoice out. Does the item description accurately reflect the product or service? Does your invoice have a clearly stated payment due date, as well as an issue date? You should also make sure your invoices are sequentially numbered so they’re easy to trace, in case any issue arises.
Simplify the Payment Procedure
As well as making sure you’ve included your bank name, account number and sort code, you may be able to speed up payment by providing different payment options. For example, overseas clients will prefer being billed in their own currency and may prefer to use online payment services like Paypal. Consider also whether to allow payment by cheque – they take longer to clear and they sometimes bounce!
Sticking to these simple rules will ensure that your clients and customers play fair and pay on time.