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Unpaid invoices getting you down? Here's 7 ways to stop it happening.

Are unpaid invoices affecting your business and diminishing your cashflow? With our experts 7 tips, you won't have to worry about them again.

Around the UK, there are tens of thousands of businesses who are struggling with unpaid invoices. Whether it’s a new customer who hasn’t paid a large invoice, or a repeat offender who frequently pays late, businesses up and down the country are being paid late. Instead of brushing these unpaid invoices under the rug, why not follow our seven tips to avoiding them in the first place.

1. Invoice Correctly

It may sound simple, but making sure that all the invoices you send out contain the correct information is the first thing to do when tackling unpaid invoices. If an invoice doesn’t contain the right information such as the correct bank account details or address, then it’s not going to get paid. Get in the habit of checking an invoice each time you send it out or upload the information to your accountancy software.

2. Check your invoice has arrived

As an addition to the first point, ensuring that your invoice has arrived with the right person is key to getting paid on time. It’s easy to misspell an email address or forget to send the invoice to your contact instead of the accounts address. Sending an email a few days before the due date is always a good idea. You might think it will come across as pushy, but most businesses will be happy to confirm an invoice receipt. 

 

3. Use a consistent tone when communicating about unpaid invoices

If you go from a soft and gentle approach to passive aggressive in the space of one email, you’re chasing invoices wrong. It can be easy to send a calmly worded email a few days past the due date, and then wait for two months to send a strongly worded email - but we promise that it won’t do your business any good in the long run. Not only will it ruin the relationship with the client, but they could dissuade their connections from using your business. Instead, make sure your tone is consistent. Know your legal rights and only send out legal documents when absolutely necessary. 

 

4. Offer discounts for those who pay early

Although this option isn’t for everyone, if it’s a viable possibility it may be worth offering a discount for your customers who pay their invoices early. It can be a small percentage off, but it could strongly encourage early payment by your customers. You may want to roll it out to a select group of customers first before introducing it to everyone - think of it as a trial run. 

 

5. Communicate clearly on Payment Terms

Many businesses have a standard set of payment terms, but it can vary by industry and company size. Even if yours are the standard for your industry, your customers' payment terms may be different, so make sure you communicate clearly what yours are when you begin a new contract. Don’t worry about this coming across as rude or abrasive - it’s better to be clear about these things. 

 

6. Credit check new customers

It can be exciting to have a new customer sign up - especially if they’re a large company. However, it’s always worth credit checking them. You don’t have to act on the information - but the more background knowledge you have, the better. Do they have a history of poor payment practices and unpaid invoices? Make their payment terms shorter. With itsettled, you can get free credit scores and reports, making your life easier. 

7. Use an automated platform to prevent unpaid invoices

The best way to prevent unpaid invoices is to use an automated platform like itsettled. The platform  immediately chases any invoice that isn’t paid on the due date. With a unique process designed by leaders in the  credit management industry, you can say goodbye to unpaid invoices and hello to having more cash in your bank account. Sign up today for our 30 day free trial. 


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