Regardless of the size of your business, unpaid invoices are an inconvenience that may affect the accuracy of your financial information. Every business needs effective strategies to help them tackle this type of invoicing and keep them in business for many years. It could be the difference between a good and a bad financial year.
Most people don’t notice, but these invoices cause a lot of damage when left unattended. In simple terms, unpaid invoices mean certain amounts of money that are owed to the business but haven’t been sorted out. When you take a look at things critically, it’s quite clear that this type of money is essential to keep the business operational. Failure to accounts receivable collections will further translate into unpaid salaries, suppliers, or vendors. In the long run, you will be slammed with late payment charges and it may even tarnish your reputation with loyal suppliers.
Without any doubt, the way and manner in which unpaid invoices are handled may make or break a business’s operations. We must ensure all our clients are fully protected. We have identified the danger that unpaid invoices cause to many businesses. As a result, we have also come up with reliable services to help organizations recover these unclaimed debts.
How Do We Help Our Clients With Unpaid Invoices?
We’ve established that unpaid invoices are a huge pain to the success of an organization. To help our clients reclaim their debts and keep running smoothly, we do any/all of the following;
Consistent and Well-designed Follow-up
If your client has failed to clear their invoice for some time, it could be due to many reasons – ranging from poor correspondence to low financial reserves. It’s a bad idea to jump to conclusions and begin to send defaulting clients threatening email messages. While you may think it’s justified to use any means necessary to get your money, doing so may ruin the relationship between you and your client.
The best thing to do is check with the client to see if there are any unclear terms about the unpaid invoice. If there isn’t an issue, we request them to state when they will make the expected payment. Then, we will consistently follow up and issue reminders about the payment untill it’s cleared completely.
Design a Discount and Penalty System
From our experience, we’ve found out that it’s possible to avoid unpaid invoices by offering discounts. If you offer customers a discount on early payment, they will likely be encouraged to pay on time. For instance, it could be a 1-2% discount on the total invoice amount for payments made within ten days of issuing the invoice. We will help you design a favorable discount approach that will help you get prompt payment without eating too much into your revenue.
There may also be certain customers who aren’t motivated by incentives. Instead, they respond to penalties. Therefore, you can add penalty charges to your invoices to motivate them to complete payment on time. We’ll help you come up with reasonable penalty charges that will not scare your clients away.
Let’s say that all other means have failed at getting a client to clear their due payment; the next step to take would be to engage the client to threaten them with further action. This could involve reporting them to regulatory authorities or charging them to court, depending on whichever is applicable in your scenario. When this happens, it’s referred to as a “dispute” between both parties. Usually, both parties will have to take active steps to represent their interests and resolve their disputes.
Many business owners know little or nothing about settling disputes. Are you one of them? Are you struggling with recovering unpaid invoices? We’ve got you covered. We are experts at mediation and dispute resolution. We will ensure that the issue is resolved amicably and that all parties comply with any existing agreement.