No matter the size of your business operation, unpaid invoices can be a terrible sign of danger. Too many unpaid invoices can cause trouble for your finances. It’s vital that you setup sufficient collection methods to deal with slow-paying customers.
If you’re having trouble balancing out all the unpaid invoices in your operation, it may help to do a little digging. Start now, and read through a few collection efforts that will help your business obtain the money it’s owed.
Do what you can to avoid unpaid invoices
Do your best to setup your payment systems in such a way that you don’t have to concern yourself with unpaid debts. You can require payment before services, or you can create a very specific payment contract.
Either way, make certain to collect a surplus of information about clients before you do business with them. More importantly, it helps to know when a payment isn’t worth the resources to track it down. A small debt isn’t worth going through hell to collect.
Always keep it professional
There’s no merit to be found in strong arming customers to pay up on their invoices. The more you toss around threats, the less likely you are to make any headway. Keep your collection attempts 100 percent professional, even if the customer is rude.
If you are owed payment by another business, it’s a good idea to write them a professional email. Express concern for nonpayment, and inform them that future business will be a challenge until the invoice is settled.
Offer discounts and impose penalties
It may help your business to boost its payment rates by offering incentives for those who pay their payments on-time or early for an extended period of time.
Impose penalties for late payments, and make it easy for clients to get in touch with your business. If they cannot reach you to explain their late payment, the problem could spiral into something it didn’t have to be.
Consider the person before considering arbitration
Sometimes it’s helpful to consider the individual or business that is behind on their payments. The situations they are facing may be overwhelming. They could have a hard time remembering to pay their bill every month, or any number of other challenges.
You may be able to solve the situation of slow payment by simply giving the client a little more time to catch up. Build contingency plans into your payment options, so clients know you are willing to work with them through hard financial times.
Don’t be afraid to take it there
If it comes to sending the debt to a collection agency, then you have to do what you have to do. You will only get pennies on the dollar in return, but filing with a collection agency is a valid last resort.