The impact of late payments on UK businesses is staggering.
That works out to £677 per UK SME, per month.
Given these worrying statistics, it’s pretty clear that invoice chasing is a constant and repetitive task for most small business owners.
Even in the cutthroat world of business, most people don’t relish direct confrontation or difficult conversations with their customers.
The good news is that there are methods you can use to get paid with the bare minimum of awkwardness and we’ve got eight simple ways you can do it.
Create a virtual accounts department
If you’ve built up a cosy relationship with your customers, it can be hard to pivot into hard-nosed conversations about unpaid invoices.
In larger companies, that kind of conversation would be handled by a dedicated accounts department, but not every business has the capacity to have a dedicated account manager.
What every business does have is the ability to use more than one email address.
By setting yourself up with an accounting@ or invoicing@ extension to your normal business email address, you can continue to have your usual friendly discourse on one channel, while sending a slightly harder-edged invoice reminder on another.
You can even adapt our friendly late payment reminder email templates for use by your new virtual accounts receivables department.
Understand your customer’s internal structure
Understanding who actually pays your invoices and building a positive relationship with them is a great step towards getting paid on time.
If you can work out the internal structure for most of your clients and understand how your invoice moves through their system when their reconciliation periods are, and who makes the financial decisions, you’ll be in a better position to apply effective pressure.
Chaser’s centralized hub gives you access to a wealth of customer data and interactive reports that you can use to builder a clearer picture of your customers’ payment behaviours and who you need to talk to about getting paid.
Learn when to date your invoices from
Most businesses you deal with will have different reconciliation processes and dates. Smaller companies might pay on a ‘when received’ basis, but many larger organisations will have a monthly reconciliation date.
While a 30-day payment period might be the norm when it comes to creating your payment terms, there’s no reason you can’t edit that payment window to match your customer’s reconciliation process.
For instance, if you know that you customer reconciles at the end of the month and 30-days would put you two days past that deadline, simply reduced you payment terms by two days, backdate your invoice, or specify a certain payment date.
It’s better to make slight changes to your payment period than wait for another 28-days to get paid.
Be timely and consistent
Like it or not, your customer will pick up on your credit control processes and they will influence their payment behaviours.
If you don’t invoice and send payment reminders in a timely manner, there’s a good chance your customers will be tardy with your payment.
That being said, if you’ve got a lot of invoices and reminders to send, being consistent can eat into your valuable time.
The good news is that Chaser’s automated reminders allow you to be consistent with the minimum of effort. Chaser sends your customer pre-advice of an incoming invoice and handles all the reminders if payment isn’t forthcoming, all without needing your oversight.
By taking advantage of Chaser’s automation options, our customers save an average of 15-hours a week on credit control management.
Offer multiple payment options
The best way to get paid on time is to offer the largest number of opportunities for your customers to pay you.
Each invoice reminder sent out by Chaser includes a link to one of our Payment Portals. Each portal is unique and includes all the information your customer needs to make a timely payment.
Our portals support payment via Stripe as well as traditional credit-debit card options.
By offering multiple payment options, Chaser helps our customers get their invoice payments actioned an average of 16-days sooner.
Implement an invoice timeline
Depending on the accounting software you’re using, you might be able to implement a document time for your invoices. Document timelines show when your invoices have been viewed by the recipient.
If the customer in question claims not to have received your invoice, or not to have read it, you’ll be able to shut that particular excuse down by being able to show when they received it and when they read it.
It’s also a good idea to include a line indicating you’ve implemented invoice timelines in your payment terms. If the customer knows you’re invoices are being tracked, they’ll make more of an effort to pay them on time.
Have clear and transparent payment terms
If your payment terms set out exactly how and when you expect to get paid, your customers don’t have any excuse for not following them.
We’ve already written about why you should have payment terms and how to compose them.
It’s also important to remember that, if you’re a UK business, you have the right to charge late payment interest, claim late payment compensation, and claim compensation for the cost of chasing the payment.
Work out regular payment terms
If you supply regular goods or services to a customer on a scheduled basis, particularly as part of an ongoing contract, then setting up a direct debit or standing order could benefit all parties.
For the customer, having a consistent payment reduces their administrative burden, lets them predict their cash flow, and means less awkward conversations with you.
As the invoicer, you get many of the same benefits with the added bonus of getting paid on a predictable schedule without constantly needing to chase down unpaid invoices.
Get paid faster with less effort
Chaser’s innovative automated credit control software, professional outsourced credit control options, and friendly, customer-relationship-preserving debt collection services help thousands of businesses get paid on time every day.
If you’d like to learn how we can help you implement effective credit control, book a demo with us today.