Tip Tuesday: Get Paid Faster by Building Better Invoices
Get Paid Faster by Building Better Invoices
If operating your company depends on timely payments on invoices, you need to make sure you’re proactive about getting paid for your products or services by your customers. Sending out an invoice and waiting around for payment isn’t going to get you your funds as quickly as you may need to continue operation.
Here’s a few tips on what to include in your invoices to promote timely payment to your clients.
Optimize Your Invoice Terms
Simplifying what’s on your invoicing and making sure what you’re saying is direct and to the point can help your clients clearly understand what you expect from them after they receive the invoice. Try using the word “days” on the invoice instead of “net”, and be sure to state a specific due date. Instead of saying “Payment due upon receipt,” try saying “Payment due in 20 days on March 15th, 2016.” This simplified version gives a set date for that your clients can easily put in their calendars. “Upon receipt” might be interpreted as paying whenever your client is ready, which can cause them to forget to pay you all together!
Another tip is using a friendly, yet professional tone while writing up your invoices. Simply add a line or two at the bottom thanking your client for their business or nicely reminding them to make sure they pay by the due date. This all goes back to when we were young children and were always reminded to use our “please and thank you’s!”
Late Payment Fees
A way to make sure your clients to pay on time and even before the due date is the use of late payment fees. If the due date you clearly specified on the invoice has come and passed and you still haven’t received payment, you increase the client’s bill by adding a late fee to the original amount. The late fee can be a simple flat rate or a percentage of the invoice, it’s really up to you!
If you choose to start adding late fees to overdue invoices, you definitely want to make a note of them on any contracts or receipts. You should include the late fee information on the invoice as well.
Try sending out reminders to your clients that have outstanding invoices. Don’t bother your clients every single day, however a quick reminder about half way from the purchase date to to due date as well as one the day before it’s due could help out tremendously. Not only will this remind busy clients they still have an invoice to pay, but it also gives you an chance to remind them that a late fee will be tacked onto their invoice (if you choose to implement them).
Some clients are really great at paying their invoices quickly while other clients wait until the due date, or even after. Try these tips out and see if they help! If your clients are generally paying you by the due date, but you need the cash quicker than that, invoice factoring might be a great solution for your business. For some more information on how invoice factoring can help you out, contact us today.