In the UK almost half of all invoices are paid late, causing businesses cash flow problems. We have listed 5 ways to get invoices paid faster so businesses can maintain positive cash flow during and after the corona crisis.
1. Ensure consistent follow-up of invoices due
Follow up on outstanding invoices as consistently as possible. This includes sending out reminders at regular intervals and by bringing them to the attention of the debtor as clearly as possible, for example via SMS or email. Smart software can automate the follow-up process, saving you time and ensuring that debtors pay faster after sending them a reminder.
Research has shown that an invoice with a payment term of 17 days is paid faster and more often on time
2. Introduce an ‘unusual’ payment term
Believe it or not: research has shown that an invoice with a payment term of 17 days is paid faster and more often on time than an invoice with a term of, for example, a month. The reason for this is that debtors usually do not take much notice of the usual payment terms such as 14 or 30 days, and use their own payment terms. An unusual payment term attracts attention, and, as a result, debtors are more likely to pay an invoice on time.
3. Offer various online payment options
The more payment options your invoices have, the greater the chance that debtors will pay on time. Popular and trusted methods with debtors include PayPal, Worldpay, Stripe and Amazon Pay. Offering debtors payment by credit card generally also results in faster payment of invoices.
Furthermore, with the right software, you can have reminders sent (automatically) with a payment link via SMS, Whatsapp or email, resulting in quicker payments as well.
When it comes to getting invoices paid on time, invoicing software is integral
4. Offer incentives
You catch more flies with honey than vinegar, and invoicing is no exception. A great way to get your invoices paid fast(er) is to offer an incentive in the form of, for instance, a small discount for customers who pay early or on time. By doing this, you can develop a habit among your clients of always paying bills ahead of the due date. For instance, you can offer 3 percent off the total price if the invoice is paid within the payment term.
5. Use invoicing software
When it comes to getting invoices paid on time, invoicing software is integral. With it, you can make and send invoices easily and quickly, automate your invoicing process, and encourage clients to pay quickly by offering them various online payment methods. Here’s a list of several good reasons to use invoicing software:
- To automate your invoicing process;
- To accept invoice payments from clients directly online;
- To see when your clients have received and viewed their invoices;
- To send automatic payment reminders;
- To enable that your default terms and conditions automatically appear on every invoice.
There are more ways to get invoices paid faster. Contact us so our expert business advisors can support you in managing debtors.