Although becoming an entrepreneur has a large number of unique benefits, it also comes with many obligations that you can’t ignore. One of the most important is properly managing your unpaid invoices.
If your clients don’t get your money to you on time, it can be difficult or impossible to pay your ongoing expenses. In some cases, a small business may simply be unable to stay afloat until the money hits its account.
Let’s explore everything you need to know.
1. Stay Polite
One of the biggest mistakes that entrepreneurs make is being too aggressive when they get in touch with their clients.
This is understandable since not receiving the money that you are owed for a project can easily become frustrating. This is especially true if the project required a significant amount of time or resources on your end. However, it’s in your best interest to avoid aggressive emails or phone calls in favor of calm communication.
2. Offer Discounts For Paying on Time
Although it might seem counterintuitive, you can often reduce latency when it comes to receiving client payments by offering a discount. The good news is that this doesn’t need to be a substantial amount. For example, it could be a fixed rate or a small percentage of the total bill.
In contrast, you should also implement a late payment penalty if your clients do not pay within a certain window of time. It’s understandable that not everybody will have the money exactly when you need it. However, if weeks go by and you still don’t receive your payment, you should tack on an additional percentage to overdue invoices for the sake of convenience.
You can check out this resource to learn more tips about invoice financing.
3. Keep Things Informal
Interestingly, many people overlook the fact that you should often discard formalities when it comes to communicating about debt. People tend to overlook business-related emails or messages after dealing with hundreds on a daily basis.
If they receive a personal message, however, it’ll be much more memorable. This also lets them know that you’re communicating as one person to another instead of from a business to a business.
4. Have a Plan to Enforce Your Collections
In the event that your clients still don’t pay, you’ll need to have a plan to collect your money. In general, you should start with the least invasive options first. This could involve contacting other members of the organization, and it might even require you to use a business mediation service.
Finally, you might need to consider going to court in order to retrieve your payment.
Managing Unpaid Invoices Might Seem Difficult
In some cases, it could even seem impossible. The good news is that it’s not nearly as complicated as you might think. The above guide has all the information you need to know about handling unpaid invoices and getting back on track as quickly as possible.
Looking for more tips that can help you out later on? Check out the rest of our blog for plenty of useful information.