Whether you’re a freelancer or own a small business, chances are you’ve had to deal with the problem of unpaid invoices. Here are 7 top tips from the ANNA team on how to make unpaid invoices a thing of the past.
1. Offer discounts for fast payment
Present a 5% discount option on your sales invoice if it’s paid within three days, or some other small, token discount. Save this one for problem clients who are consistent late-payers, and consider increasing your initial quotes to cover any discount.
2. Know your client’s payment runs
Companies tend to pay invoices on certain days each month, so make sure you know when these are – missing a payment run by one day might mean waiting an extra 30 days before you get paid.
3. Get your invoice details right, and looking good
A messy invoice template with info missing could put your invoice in someone’s bottom drawer. Invoices should include things like your VAT number, itemised details (of services or goods you’ve provided), PO numbers, client contact names, as well as the obvious things, like your bank account details. If you have an ANNA account you get beautiful, accurate invoices every time.
4. Get your payment terms right
If you ask for ‘payment on receipt’ you might be paid quickly, but you also might find your invoice ignored because it’s already late as soon as it’s sent. Aim to agree payment terms with clients in advance and before the invoice is even sent. If you give people 60 days, don’t expect to be paid any sooner.
5. Send an invoice email
Don’t attach anything else along with your invoice. Attachments can be ignored or lost in bigger emails, and this vital attachment deserves a dedicated space, with a clear subject line, and a request for payment. It’s always a good idea to remind the client of the payment terms in this email too.
Get confirmation that your invoice has been received, in writing if possible. Then remind clients the day before the due date, to confirm it’s being paid. The moment it’s overdue, start to politely chase your payment. Get your client contact on the phone if you need to, as your livelihood relies on people paying for the services you provide! If you’re sending out multiple invoices, put due dates in your work calendar to help you keep track.
7. Pay other people promptly
If everyone just did point seven, the business world would be a better place, right?