One of the biggest reasons for delays in payment of invoices is that there’s a big delay before customer receives it. It could be that the person who has done the work doesn’t think it’s important to get the invoice out as soon as possible but here is the thing, the sooner the invoice is out and in front of the person who ordered the work, then the sooner it will be paid.
The idea is to get the invoice out immediately after the work was done, so I wouldn’t even wait until Friday to send out invoices for work that was done that week. I would send it out the same day, and so I would send it out on Monday or Tuesday or Wednesday, whenever the work was done.
Now depending how many invoices you need to write and send in a day, you might need to get someone who is an expert at creating invoices or you might need to get some software like Xero that’s quite easy to use to send out invoices straight away.
1. Send Your Invoices Immediately
get someone who is an expert at creating invoices or you might need to get some software like Xero that’s quite easy to use to send out invoices straight away.
2. Confirm Invoice Address
The second biggest reason why invoices aren’t paid on time, is because there is an error on the invoice or it goes to the wrong person or it goes to the wrong address.
So, step number two is really to get it out fast but get it out right. So the thing to do is before you write the invoice or you finish doing the work, is to double check with your customer exactly what they need to see on the invoice. They might need an order number, they might need a delivery address, they might need somebody’s name, they might need a ship-to address, and an invoice-to address but make sure you know exactly what a customer needs to see on the invoice.
What will happen too when you ask your customer for all the details is that they will really like you doing that, they’ll really think that you’re providing good service as long as you do it in a very friendly and positive way, but it will start to make your customer think that you’re really service focused and they’ll definitely like that.
One of the reasons why invoices get paid on time, is because the customer likes the person who has provided the goods or the service. If people like you, they’ll pay you just in the same way that if people like you, they’ll buy from you. If people like you, they’ll pay you. And the more they like you, they more they’ll pay you before they pay their other bills.
The next step is to get it to the right person. So, when you’re asking your customer for all the details they need to see on the invoice, check the address, check where the invoice needs to go to. It might be somewhere completely different to where the goods or the service were provided. And you need to find out too who signs off the invoice and who actually makes the payment. When I say, “Signs off the invoice,” who is it that says, “Yes, we did receive these goods and service.”.
It might very well be that that person also actually physically makes the payment but it might not be. So, it’s worth checking with your customer who actually authorizes the invoice payments and says, “Yes, this is okay. It can be paid,” and who actually physically makes the payment. So, who does the bank transfer, who does the credit card transfer, and so on.
3. Make Sure That The Customer Knows The Exact Due Date
Another one of the reasons why people don’t pay on time is because they don’t really know when payment is expected. And so, if they generally pay invoices 60 days or 90 days after they come in, or they just go on a pile until somebody calls them and reminds them that the invoice has got to be paid, then that’s a bit of a problem if your terms are seven days from the date of invoice or 14 days from the date of invoice or even 30 days from the date of invoice.
So when you are writing out the invoice, make it rally clear for your customer when you expect the invoice to be paid. Put the payment date and that’s the exact payment date, big and clear on the invoice, and if you can, in another colour, and with a lot white space around it, so that it’s really clear.
For example, if your payment turns out seven days from date of invoice and today is the 1st of the month, then really clearly and really boldly put on the invoice, “This invoice is due for payment on the 8th of June, or the 8th of the month rather.”.
4. Make A Phone Call
I’ve mentioned this a little bit before is to get the customer to like you. Because when people like you, they pay you. So before the invoice is due for payment, make a service call to the customer, so let’s say the invoice is dated the 1st of the month, and you’re invoice is due to be paid on the 8th of the month. Well, maybe on the 4th of the month you call the customer to make sure that there is no query with the service or the products that were delivered.
Again, what this will do, – don’t be concerned that the customer might think that you’re chasing payment of the invoice before it’s due. Just make this a completely customer service focused call.
Ask how the customer is, is everything well with the service or the products, and then the customer will think that your customer service focus is great and you can have a little conversation either side of you asking if the product or service is still good, and then at the end, after you’ve built some rapport with the customer, you can say to them, “Well, it’s actually due for payment in another couple of days, is there anything more that I need to do for you to make sure that the invoice is paid by the due date?”.
5. Be Clear And Straightforward
And the last reason why invoices aren’t paid on time is because it’s not really clear on the invoice how the supplier wants to be paid. So, as well as putting the payment date really clear on the invoice, all the methods of payment and all the easiest methods of payment need to be on the invoice, and in a really prominent position.
So for example, “Please make your payment out to XYZ Company Limited.”.
Bank transfer and all the details of your bank.
Credit card payments, how they can pay by credit card – can they call you and give the credit card details over the ‘phone?
List abolutely every option that’s available for you to make it easy for the customer to pay. So, if they don’t have a credit card, they can make a bank transfer. If they don’t use electronic banking, they can write a check. Also, you’ll need to have the address of where the payment needs to come to as well.
So really, getting invoices paid on time isn’t really as difficult as people think. If you imagine that 49% of invoices go out incorrectly calculated or to the wrong person or to the wrong place, already, that’s half of all the invoices that go out. It gives the customer a heap of legitimate reasons reason to delay payment, and just remember that lots of customers just put their invoices into a pile and wait until the supplier calls them to ask for payment. So if you call before the invoice is due, then you are very likely to get your invoices paid by the due date.
