How to avoid late payments
From time to time, despite our best efforts we all miss an invoice, but when you are on the receiving end of the outstanding invoice, how do you go about handling the situation without alienating your clients?
Firstly, we would advise that you have a clear debt chasing process in place. We will follow up with a tip on debt chasing specifically and how Avanti may be able to assist you.
Build a rapport with your clients. The advantage that an SME has over larger companies is the fact that the client will most likely deal with the director and senior team members throughout their transactions. Putting faces to the business that you do will humanise the transactions and that relationship will lead to invoices being paid on time.
Incentivise your clients to pay early by offering early payment terms. This could be, but doesn’t need to be, a financial discount, it could also take the form of free advice meetings that would normally be chargeable.
Make sure your payment terms are clear and that all staff are aware of the invoicing and payment process. Your clients need to know exactly when your invoices will be due, so that they can financially plan too.
Spot potential problems early. If a client comes to you and flags something which may be a financial concern, you don’t need to refuse them. Instead offer them a payment plan that works for both of you and get payment up front before work is completed.
Don’t be afraid to chase late payments, emails may be missed, but direct contact such as a phone call is harder to dodge. Call your client and follow up using a debt chasing process to get those invoices paid. Remember, Avanti can assist you with this. If you are struggling with clients who have overdue invoices, give us a call 08000388799