What to do with Unpaid Invoices
Small businesses can only deal with so much when it comes to unsettled or unpaid invoices owed by slow-paying clients. Working with slow-paying clients affects the working capital cycle of a business and dramatically slows the ability to grow. Sluggish payments will impact your business and if not managed correctly, could drive you out of business.
What is the impact of delayed payments to your business
The truth is that large businesses tend to relegate small businesses to the bottom of the stack when it comes to paying invoices. If you own a small business, you understand the damaging impact this can have on your ability to run your business. This can cause trouble in making payroll, paying your rent and maintaining lease payments on your vehicles and equipment. Unpaid and overdue invoices can keep you from growing your business. The challenge always lies in producing enough cash flow to keep the doors open.
Creating policies for overdue payments
When you determine a system for handling late payments you have better luck getting paid. For example, you need to make a practice of acting punctually when an invoice is overdue, even for a day. The procedure should be automatic and with software like MYOB, Xero or Reckon, you can easily carry this out, with many add-ons apps that provide automated monitoring with inbuilt alerts.
Handling clients who frequently pay late
Before payment is due, set up automatic reminders to go out weekly or biweekly. It will keep the deadline fresh in your client’s mind and automating it will make sure they don’t feel singled out. Together with this, there is nothing like ongoing communications with your clients, let them understand that punctual payment is vital to the ongoing viability of your business, that you are not a bank and that in order to continue servicing as you have you require prompt payment within your pre-agreed payment terms.Being more proactive about getting paid on time gives you more control over your cash flow, and your business’ future.
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