Business Accountant

Home » Accounting Records » 12 ways to get your invoices paid faster

12 ways to get your invoices paid faster

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 7,595 other followers

Archives

Categories

  1. Discuss credit terms with your new client – set the expectation
  2. Change your credit terms to be less than they are right now – research has shown that invoices are paid 2 weeks late. So better to be paid late on short credit terms than late on long credit terms
  3. Get invoices out on time – be clear about what makes a service or product billable and bill it. Don’t be shy about billing promptly, the client has had the service\product, they need to pay for it
  4. Make it standout – clients processing lots of invoices may put it on the pile with the rest, but if it stands out then chances are that it will get paid faster
  5. Be able to report your aged debtors and then chase the late ones rigorously. Send a statement and call them – some people get so much email that it gets ignored
  6. Add late payment charges – you can always reverse them but it will generate a conversation where you can re-iterate your priority to be paid on time
  7. Get the entity right that you are invoicing – if it is called Jupiter Construction Limited, don’t put JC limited on the invoice
  8. Make it get to the right person – does it need to go to the budget holder or accounts payable or both
  9. Do you offer multiple payment methods – cheque, bank transfer, paypal, debit card, credit card – the more methods the more likely you will get paid faster.
  10. Review the average days to pay for your clients and target the late ones – don’t treat all clients the same
  11. Delegate your credit control – if you are running the business and delivering to clients you won’t focus on this and a part time resource can
  12. Send electronic invoices with Pay Now feature – Xero cloud accounting does this

david@graceaccountants.co.uk


5 Comments

  1. venkatpillai says:

    Good persuasive points. Point no.9 may not work well as there is a fraud risk in having multiple payment options and it may not go well with customers.

    • davidan2013 says:

      Please could you substantiate the fraud risk point for the benefit of readers

      • venkatpillai says:

        Thanks. Most of the companies are moving towards bank transfer where there are better system controls in place. The bank account numbers of the vendors are updated in the master and the payment file is uploaded after internal approvals through the bank payment gateway and is considered safe and secure. Cheques have their own disadvantages in terms of having only manual controls which have proved time and again to be susceptible. The probability of inaccuracies, duplicity and prone to misuse is comparatively higher and chances of detection lower in the case of cheques. There have been known instances where cheques have been written in the names of fictitious vendors (the employees or their counterparts being the beneficiaries) and have gone undetected for longer period of time

  2. venkatpillai says:

    All the points are persuasive. However Point no.9 will not go along well with the customers as there is an element of fraud risk associated with multiple payment options.

  3. umar nawaz says:

    The invoices followup indeed play a vital rule in payment. My evergreen suggestion is to dedicate an individuals (if possible in the volume of company) for continuous followup through affective communication.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow Business Accountant on WordPress.com

Enter your email address to follow this blog and receive notifications of new posts by email.

%d bloggers like this: