4 Ways to Get Your Invoices Paid Sooner

One of the most overlooked tasks in small business is getting your customers to pay their invoices on time. Unpaid invoices directly impacts your business’s cash flow, and cash flow can directly impact your business’s ability to pay operating costs or even capacity to invest in expanding your business.

With Australian businesses constantly facing slow payment issues and invoicing being an important facilitator towards achieving a strong cash flow position, we have outlined in this article on how to get your invoices paid faster.

 

1. Have Clear and Polite Invoices

In a world of information overload, it is vital that your invoices are clear and concise. Use a business logo for easy identification, and use language which is simple and easy to follow, rather than business jargon.

Simple additions such as “please” and “thankyou”, along with requesting payment within “14 days” rather than “net 14” can surprisingly go a long way as well. Slight tweaks to your invoices with clear phrasing helps minimise any possible confusion, and ensures the client knows exactly what is expected of them.

In fact, The FreshBooks company studied different invoice payment terms to learn the impact they had on likelihood and time to get paid. More specifically, part of this studied showed the impacts of a polite invoice, and found it can increase payments by up to five percent! So being polite really does matter.

Invoices should also be personalised for the client wherever possible and should include their requirements as well, for example, a time log, purchase order number, or other specific details that aligns with their internal systems or processes.

 

2. Make the Key Details Stand Out

Essential information like the invoice date, payment due date, and the amount should be obvious. Having these features stand out establishes the importance of payment, but more importantly when invoices fall due.

Many companies now adopt online invoicing and online payment options using online accounting software like Xero. The benefit of online payments is that it reduces time and hassle for the customer, whilst at the same time increases the ability to get paid. Whatever your payment preferences are, make it clear how you want to be paid, and within what time frame. Simplifying the layout of your invoices can also be a great way to making sure key information isn’t missed and is communicated effectively.

 

Common Forms of Payment:

3. Cash
4. Credit Card
5. Electronic Funds Transfer (EFT/ Direct Deposit)
6. PayPal
7. Cheque

 

3. Invoice Timely, Follow up Often

Sending an invoice as soon as possible is clearly the most logical way to get paid sooner, as it keeps your business at the forefront of your client’s mind and reduces any confusion from their end. Once the invoice is sent, it is important to stay in touch regularly. Friendly emails or texts regarding the approaching payment date can also help to limit late payments.

In the event of a late payment, it is acceptable to re-invoice and send a follow up email immediately, followed by another reminder within one to two weeks of non-payment.

 

4. Charge for Late Payments

Terms for late payments should be set out in your trading terms, but also on the original invoice. If you charge fees for late payments, it’s important to make sure this is clear to the customer so they understand the consequence of any delayed payments.

An alternative and more positive approach is to offer an incentive within the original invoice, for on time payments. Many companies are offering a cash or percentage discount for paying an invoice on time. The opportunity to save money could encourage the customer to pay on time.

 

Have invoices overdue by 30 days or more?

In the event of an invoice being overdue by 30 days or more, than it’s time to talk to a leading debt collection agency. With proven collection methods and access to industry leading technology, an ethical and reputable recovery agency will represent your business professionally and generally collect your entire debt on your behalf.