![]() In fact, you don’t necessarily have to wait until the agreed date to send a reminder. Thus, sending a simple reminder may be what you need to get paid on time. Sometimes, clients get so overloaded with work that they forget to clear their vendor’s invoices. ![]() Pro tip: Offer discounts on early payments or waive certain fees if clients make payments within a certain time. ![]() For instance, the UK government allows small businesses to charge up to 8% interest plus the Bank of England base rate on overdue invoices.Īs such, when customers know that they’ll pay a certain amount of interest on late payments, it encourages them to clear invoices faster. In some countries, the law allows you to charge interest for late payments. To avoid this, communicate your late fee to them in advance. Some customers may delay payment unless they know there’s a penalty. When setting expectations, be clear about the consequences of late payments. Inform clients about interest on late payments So it’s only normal to wait until after 30 days before the chasing begins. For example, some companies usually have a policy of paying invoices after a 30-day period. To prevent any issue from arising, clearly communicate your payment terms by providing vital information like:Īlso, it’s best to ask customers if they have any payment policy that may delay your payment. To put this into perspective, that’s almost two full working days spent chasing invoice payments. According to a Quickbooks survey, mid-sized businesses in the US waste an average of 14 hours per week following up on late payments. The challenge Sarah faces is prevalent among SMEs. It affects your ability to focus on revenue-generating activities. Invoicing a client and then chasing after them for payments isn’t sustainable for Sarah or any other business owner. As such, she spent more time and energy chasing overdue invoices than she did working on campaigns or marketing her agency. Some of Sarah’s customers who usually make prompt payments were now dragging their feet. Sarah worked tirelessly to build her personal brand and eventually secured her first few clients. The first few months were a flurry of activity. After almost 10 years working at an advertising company, she took a leap of faith to start her creative agency. Sarah has always dreamt of having the freedom to produce advertising campaigns that reflected her own creative vision.
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