Late payment is something every small business has to deal with at one point or another. Indeed, the latest figures show that more than 40% of all invoices in France are paid late!
Besides the financial impact and wasted time, late payments are also a nuisance because you may feel helpless in the face of them.
What can you actually do if one of your best or biggest customers has an overdue invoice? You don’t want to damage your relationship by being too pushy, and it’s not like there is strong legislation to protect you…
However, there are several concrete steps you can take to avoid late payments. Read the guide we created to find out more!
A few things to ask before sending your invoice
A common excuse for late payments is that something is wrong with the bill. Information is missing, the invoice has been forwarded to the wrong person or department, or it simply has not been received. Here are three questions to ask your customers before sending anything to them:
Do they use a purchase order system? If so, make sure you receive the necessary information and include it on your invoice before sending it;
Which billing method (email, mail, or maybe e-bill) does your customer prefer? Aligning yourself with billing software for small businesses will inevitably result in a shorter payment period;
Who is the correct recipient of the invoice? The person you communicate with is not necessarily the person paying the bills. This is especially true in somewhat larger companies, with different departments and established processes. Get the right name and contact information right from the start if you have billing software for small businesses.
Investigate Your Customers
Assuming that your customers are businesses too, it might help to do a little research on their creditworthiness. To do this, there are a few tools.
Know your rights
Once an invoice is overdue, you are entitled to charge interest.
If your customer is ignoring your attempts to contact in order to resolve the debt issue, you may want to consider legal action. This is quite drastic and risks subsequently damaging your relationship with your customers. Think about it before you start.
You will need to send your client a letter of formal notice before legal proceedings. This is the first step before starting legal proceedings for debt collection. Once this letter has been sent, it is time to seek professional help in taking your case to court.
For more details, please visit: alfacybernetics.com