Collecting Late or Unpaid Invoices

1. YOUR GUIDE TO GETTING PAST DUE you did the work, submitted your invoice and waited patiently for payment. ow the 30-day deadline has passed, and there’s no sign of your money. You don’t want to burn any bridges, but the overdue invoice is damaging your cash ow. WHAT NEXT?

2. Short answer — right away. If you know you have a good relationship with the client, you can probably afford to wait three to four days before chasing the payment. But even with trusted clients, don’t leave it too long. You are legally entitled to be paid for the goods and services you provide, and lack of follow-up makes you look unprofessional. If you don’t receive a timely response, send another email and call their nt. Make your initial contact via email.

3. Most states protect small businesses against late payments by allowing a monthly finance charge for overdue invoices. Rules vary, but as long as you cap late fees at 10 percent you should be fine. One word of caution - it's only appropriate to charge a late fee if your client understands that you reserve the right to do so. Make sure your contract warns new clients that you may charge interest if invoices aren’t paid on time.

4. If the customer disputes your invoice and you don’t have a contract counter their objections with the law. The phrased you need is "quantum, meruit," Latin for " as much as he deserved." This means you're entitled to the responsible value of your services, based on your customary rate. Carrots are often better than sticks when resolving disputes, so you could also try oering a prompt-payment discount or setting up a payment plan. Also remove some friction by letting clients pay in a way that suits them best, such as ACH payments, credit cards and PayPal transfers.

5. legal action should'nt be an empty treat, so familiarize yourself with what a lawsuit entails. It’s also worth doing a cost-beneysis on heavyweight debt collection. Wheather you hire a lawyer or appoint a collection agency, at a certain point, it's no longer worth your time or egency to try to collect an unpaid invoice. Ultimately, the best way to keep on top of late payment is to set aside some time every week to deal with credit control.

6. If you are repeatedly having problems getting paid, it may be time to review your customer contracts. With every new client, make sure you explain your terms of business and invoicing protocols. Other options include asking for a down payment or a percentage upfront (or even full payment) before work begins. It’s obviously important that your customers pay for goods or services rendered, and following these tips should get hard-earned cash into your account much quicker. Sources: https://www.bluevine.com/guide-to-getting-paid/ https://www.facebook.com/unitedcapitalfunding https://www.twitter.com/ucfundingcorp