Top Tips to get your invoices paid.

Despite the unprecedented times we are living in, bills, wages and overheard must be paid. Whether businesses are running or not, those invoices must be paid. While this is the plain truth, some people and organizations might be tempted exploit such situations.

For example, during this period of rampant lockdowns, most businesses would lag in paying rent simply because they closed. Here are seven top tips to ensure your invoice gets paid

  1. Be considerate and reasonable

Take a breath and think through the symbiotic relationship existing between you and your customers. Understand that most of your customers are likely to remain after a crisis is over. Therefore, it is prudent to keep them on side while taking care of the health and survival of your business. 

If dialogue cannot be achieved, then it is wise to put in place a toolkit to have your invoices paid. Unfortunately, you will have some people that will use the virus as an excuse to not pay their invoice on time, but not having patience may makes things worse.

  1. Consider electronic credit control

This is a period where many employees have been working from home. This being the case, it could be ineffective sending invoices and follow-up letters via the post since they may never be picked or maybe picked very late. 

If you want your payment to be processed during this work-from-home era, you must embrace electronic invoicing as well as credit control mechanisms where possible. These processes ensure instant message delivery and it is a guarantee that your employer will receive the invoice.

  1. Consider advance payments

If you had trouble with late invoice payments before, or the expected invoice amount is expected to be considerable, then getting payments in advance could be the way to go. This method works quite well for businesses with high value products and services. At the very least, consider taking deposits – around 30% or perhaps enough to cover actual cost, at least that way you break even.

  1. Impose interest charges on late payments

If an invoice has interest payments past the due date, most people are careful not to miss payment deadlines. Check if you could include interest charges to encourage timely payments from your customers. 

Otherwise, you can use the Late Payment of Commercial Debts Act as it applies to B2B contracts. This provides at least 8% a year interest on the price of goods or services, plus a fixed sum and reasonable cost of recovering the debt.

  1. Ask your customer for security

You can take security should you doubt the customer’s ability to make payment, and you cannot get an upfront payment form them. The security could be a floating, personal guarantee or a fixed charge. If you consider a personal guarantee, it is important to have them documented correctly to avoid future conflicts. It is also key to ensure that the security is saleable, valuable and will retain its value.

If your business sells merchandise, it is advisable to retain ownership pending payment. When the customer fails or delays to pay, consider having a legal document which permits you to repossess the goods or hold a property which belongs to the customer until the payment is done. You can also threaten to repossess your goods should the customer fail to pay.

  1. Prioritise Customers

If you foresee possible cash-flow problems, identify customers who have a tendency of making timely payments and work for them. Make your customers understand that advance payments will be prioritised during times of high demand and extra fees will be charged for express services. This concept has been in for some time and customers are used to it.

  1. Take legal action

This should, of course, be the last option and should only be taken when the customer continually refuses to pay, ignores dialogue etc. If you escalate the matter to the court. There are legal procedures which can be used to make payment fast and also protect you and your business from loses.  

Having invoices paid in a timely manner is obviously important, not least to maintain your cash-flow.