Getting clients to pay their invoices!!!

[HoneyFlowers]

I am nearly a grand out of pocket from clients who have not paid for work done in March. Invoices sent out end of March with pay schedule of 14 days. It is such a waste of my time chasing payments up every month. It's always the same response... "I never got it... I don't remember seeing it..."

Driving me mad and feeling deflated from the effort.

Hire a bookkeeper to chase the payments for you?
ask for payment upfront before doing the work?

Can you add a late payment fee if not settled in a given time frame?

For many (especially bigger compnies) not paying promptly is a business practice. One Co I dealt with would prepare cheques but withhold them until the supplier threatened court action.

What are the payment terms of the clients? I work for a big employer who pays within 30 days of the end of the month it was invoiced, no matter what the suppliers invoice says. Not saying that's ok, but perhaps more realistic

Legally you can add late payment fees after 30 days and they ramp up quite quickly. Well worth doing.

Decades ago I worked for a small company and this would drive us all to distraction.

It's standard policy for big companies to delay payment. Our usual delay was 3 months after invoice even though our terms were strictly 30 days from the end of the month.

We had a process in place to mitigate this.

The first was to offer an early payment discount if invoice was settled in full within 30 days.

Then we had a robust system of reminders. The first reminder went out promptly the day after the 30 days.

The second went out two weeks later and was in red ink.

The third was two weeks later and was a notice of us taking action via the small claims court for unpaid invoices and asking them to contact us urgently.

Then the last was us taking them to court.

Invoices were almost always settled before the last letter. Most would pay with the early discount incentive.

Chasing unpaid invoices took a lot of my time!

You have to have robust retrieval systems in place as if they went into receivership you'd never see the money owed. The quicker it's settled the better.

When I worked in credit control I would contact the company a week before invoices are due , very friendly to check they had the invoices (make sure you put a due date on them) and no queries and that they would pay them. Built up relationships and get to top of pile. Many many companies will wait until chased, not good but is reality.

The people I am billing aren't companies but individuals who are using my service. My terms and conditions state a late payment fee. Not worth a book keeper, I am self employed and probably send out 12 invoices a month.

Thanks for the replies so far.

I like the suggestion above about a reminder before due date. So if I send out on 1st of month and on the 10th remind that payment is due on 14th to avoid a late payment fee of £25. I like this.

is it easy to settle accounts with you? e-transfers are really popular here.
i have a Square and people can tap their credit card (or swipe) works with bank cards as well.

I consider it a savings account in a way. Our private clients always pay pronto or with a quick reminder after a month but the big guys! My god it’s forever and no I don’t stress about it because they pay eventually - usually 3 months but not unheard of 6 months!

A discount is a great motivator and (in my experience) much more effective at getting invoices paid on time than the threat of a late fee.

• a discount for early payment

If you have a small business, you are likely on first name terms with your contacts and have their mobile numbers. When you email invoices, send a text saying ‘just letting you know I’ve emailed the invoice. Can you let me know when it is passed for payment? Thank you, and looking forward to hearing back.’

If no reply, follow up with ‘could you let me know if my invoice will be paid in your April payment run? Really appreciate the business.’

Thats what I do! Most contacts want it off their desk and into accounts, and don’t want their relationships with suppliers held up internally.

Thank you, another great suggestion about the text.
I post my invoices out because I fear via email they'd go in the spam folder. Maybe I'll continue posting and a text message too. 👍

Just email them. Email ones get paid immediately as I open them on my phone and can then go straight to my banking app. Posted ones go on a pile and will be dealt with later. Things may go on top and they are more likely to be forgotten than an emailed one. Plus you are paying unnecessary postage.

For me text messages are best. If they were posted I’d likely never see them/get to them. Email is fine but a reminder by text is ideal. Post will cost you in time and money and is easy to ‘forget’.

Definitely email invoices and have some form of online payment service linked (PayPal or stripe) so they just have to open the invoice, tap and pay easily.

Definitely stop posting invoices - how do you know the client is receiving them and they've not been lost in the mail or chucked in the bin with the junk?

I'm self employed and run my own business too. Are your clients regulars or is it new people each month?

I provide a service rather than a product so if they're regulars that stop paying, I start charging them up front, or pause service until they're up to date on payments (I have done both of these in the past - it's funny how quickly people are able to pay then!)

If you provide a physical product that's a bit tougher - can you just ask for payment on receipt of the item instead? Provide a card machine or BACS info so clients don't need cash and can pay you on the spot.

Send an invoice with a 'Pay now' button. Also offer a good discount if invoice paid within a week. This might encourage them to pay straight away.

I recommend looking into using a third party company which offers a direct debit service, such as GoCardless, who we use at my place of work. You’ll pay a small amount in fees, but you are able to set up the date of the DD collection yourself.

It’s becoming more usual for companies to only offer DD as a method of payment, I guess for the same reasons as yourself - repeated late payment.

I have found that easier payment methods help. I don't live in the UK but I send a payment request on an app that is linked to people's mobile number. I also ask for a deposit up front of 25% of the payment. Depending on how frequently people use your service, how much it is and how bad they are at paying, could you consider asking for payment in advance? Maybe set yourself an hour every week to sit and chase payments rather than wasting headspace every day thinking about cheeker fuckers wo haven't paid. Keep a shit list.... don't do work for people on your shit list.

A new policy on payment with a substantial charge for each day they do over the payment date.

It's part of running your business. You send, you chase, you chase again, in the end you subtly threaten, if payment not received by the end of next week further action ....., then I'm afraid if payment not received small claims court threat. It's easy. Phone. I find phoning puts the person on the spot and they often agree to pay. I am a book keeper, finance manger, I do this very day and love it!

Is it a service you can get them to pay up front for?

I usually do the bulk of the work then invoice and say the work will be delivered to them on receipt of payment.

Before I did it this way round I wasted hours chasing payments. Now I get paid within 24 hours.