Invoices, whether paid or unpaid, are equally important and demand proper handling. Businesses that fail at this front are likely to face improper cash flow. We won’t be surprised if a business falls because of this as money is needed for survival and improper invoice management can create shortness of money. This is why having online invoicing software is a must.
For small businesses, handling unpaid invoices is a tedious job as it demands efforts, time, and resources. However, once they have the best invoice billing generator software, unpaid invoice management becomes a cakewalk.
How it would be possible and how online invoicing software makes the life of a small business owner a bit easier are some questions that we will try to answer in this post.
Why Unpaid Invoices Should Be Managed Properly
Unpaid invoices lead to improper cash flow and, when ignored for a longer time, a business may run out of money to remain operational. A pile of unpaid invoices will keep your team busy for a longer time. Hence, it is better to settle down the invoices as soon as possible using the online billing software for Enterprises.
Unpaid invoices hinder the growth journey of a small business. Such businesses already deal with limited investments and unpaid invoices can make them go kaput at the drop of a hat.
What Are the Best Practices To Avoid The Incidents of Unpaid Invoices?
Do you know that almost 64% of businesses are suffering from late payment issues?
We know that unpaid invoices are a big nuisance but they are not a part of a small business’s operations always. There are some preventive measures when taken properly that can keep them at bay.
For instance, make sure that your customers don’t get the shock of their life once they see the invoice. An unexpected invoice amount also leads to non-payments. So, it is wise to provide the estimates before the final service. This gives an idea to the customer what might be the expenses and it can get ready accordingly.
The other step that small businesses can take to reduce the incidents of unpaid invoices is to send them promptly. Once a service provider is handing over the invoice late, the customer pays it a little later. So, try to send them as soon as the job is done. Using online invoicing software for automatic invoices is also a wise move to make.
It is a proven fact that businesses that accept online and diverse payments are likely to face fewer incidents of unpaid payment. Online payments integrate commendable effortlessness and convenience in the payment system. Also, accepting payments via multiple modes makes a huge positive impact and speeds up payment processing.
Sending reminders regularly is also helpful. There is no harm in reminding the customers about the payments. Sometimes, it slipped from customers’ minds. This is where the best invoice billing generator software comes for your help as it can send auto-reminders & notifications to the customers and ensures that payments are not missed out.
Tips to Get due Invoices Paid
Many businesses have witnessed a huge dip in the incidents of unpaid invoices after they implemented discounts for early payments and the penalty for late payments. Small businesses can adopt this practice as well. However, make sure that the discount doesn’t lead to a loss.
Despite adhering to these practices, some unpaid invoices still follow a small business. In that case, small business follows below-mentioned steps and deal with them easily:
Take the help of an overdue invoice
Sending an overdue invoice for every unpaid invoice is a great way to deal with non-paying clients. Once payment is pending, try to resend the invoice with an overdue mark as a reminder. It is important that you are sending them at the right time.
To ensure this, one must consider using the online billing software for Enterprises. This piece of technology will automate the entire process and ensure that each procedure is happening at the right interval of time.
Use the statement of account
If a client has many due payments, send them the statement of account to have better clarity over what is due and or nearly due. It gives a clear picture of how many (or which) invoices are pending, thereby, eliminating the confusion and re-assessment.
Offer the facility of partial payment
It is more likely that the customers of a small business are either start-ups or small scale industries only. Just like you, they also might be dealing with a cash crunch. Allowing partial payments is the best way to avoid huge money blocking.
It is a win-win situation for both the service provider and the customers. This also ensures the continual flow of money as you will receive a certain amount of money at regular intervals.
Stop serving them
If your services are subscription-based then it is wise to stop providing the services to the customers who are least bothered by service payments. Assuming that your services are pivotal for the customers, non-delivery of service will force them to clear the pending bills.
Take the help of law
Each service delivery, in a business ecosystem, takes place under a contract. Make sure you state the terms of payment clearly in that contract. If a client ignores all the above-mentioned steps and still does not pay the bills, it is better to take the help of the law.
You can begin by sending a legal notice to the customer. If that has also been ignored then it is time to get engaged in a legal proceeding. Hire a legal advisor, state the condition accurately, and figure out your best legal help.
Unpaid invoices can be the reason for the downfall of a business if ignored for a long period of time. They can hamper the present growth, damage the future, and destroy the existence of a small business completely.
So, a small business needs to be very attentive about it and take appropriate steps to ignore them. online invoicing software is a great help to ensure timely payments, regular reminders, and better invoice management.