Tightening Terms – Simple Changes to Your Invoices That Speed Up Payment
An invoice may seem like little more than a request for payment, but the information it contains can have a real bearing on how quickly that payment reaches you. Missing details, vague payment terms or uncertainty over what happens when an invoice becomes overdue can all create opportunities for delay.
Taking a closer look at the way you invoice your customers could therefore be one of the simplest ways to improve your credit control.
Give a Specific Payment Date
Terms such as ‘30 days’ are common, but can leave room for confusion over when the 30-day clock starts. Stating the actual payment due date on the invoice makes the deadline immediately clear.
Your payment terms should also be agreed before any work begins rather than introduced when the invoice arrives. The customer then knows exactly what is expected and cannot reasonably claim they were unaware of your terms.
Make It Easy to Pay You
Sometimes the smallest omissions cause unnecessary delays. Make sure your invoice includes all the information your customer needs to make their payment, including your bank details and any reference they should quote.
For larger organisations, it is also worth checking whether a purchase order number or other information is required before an invoice can be processed. Finding this out beforehand avoids an invoice reaching the accounts department only to be rejected and sent back.
Check Who Should Receive the Invoice
Sending an invoice to the person who commissioned the work does not necessarily mean it has reached the person responsible for paying it.
Before starting work with a new customer, establish who handles their accounts and where invoices should be sent. For existing customers, check these details periodically. Staff change roles and businesses update their processes, so information that was correct a year ago may no longer be current.
Don't Let the Invoice Sit There
Clearer invoices can remove many of the excuses that hold up payment, but they still need to form part of an effective credit control process.
Keep track of when invoices become overdue and follow them up promptly. The longer an overdue invoice is left without action, the easier it becomes for payment to slip further down the customer’s list of priorities.
If overdue invoices are becoming a regular problem, Jackson CRS can help you strengthen your credit control processes as well as recover debts that remain unpaid. Our outsourced credit control service is designed to help businesses manage payments more effectively and protect their cash flow. To discuss your credit control needs, call the office today on 01603 319 034
Be Clear About Late Payment
Your terms should explain what will happen if payment is not made on time. This may include your right to charge interest and recover costs where applicable.
For qualifying business-to-business debts, the Late Payment of Commercial Debts (Interest) Act 1998 provides statutory rights relating to interest and compensation. Making your position clear from the outset can encourage customers to take your payment deadline seriously.
It is equally important that your terms reflect what your business is actually prepared to enforce. A warning that is repeatedly ignored without any follow-up soon loses its value.