Everyone wants to get paid, fast! One of the simplest solutions is to make sure your client has actually received the invoice. Yes, it sounds too simple to be true but it can be surprising how often this is the only barrier in receiving payment.
What can be Done to Ensure you Get Paid?
Know the process. Each AP department is different, but in almost all cases AP should receive your invoices in a timely manner. Mistakes often come about when invoices are sent to the buyer or another contact at the company instead of AP. Other items that may delay payments are if the invoices do not have the pertinent information that your customer requires. Be sure to ask what is required on each invoice. Do they need the PO number, EIN, a detailed breakdown, a general description, etc? It will take some time upfront to make these inquiries, but you will save time and money down the road if you don’t have to re-invoice a customer due to missing or incorrect information.
Once invoice has been sent, make sure it’s in process. This can be a double bonus because it gives you a chance to cultivate your relationship with the client (AP) and maybe discover other issues on the account that may be hindering the payment process. You can also send friendly reminders, with a copy of the invoice attached, at regular intervals up until the due date to help your clients remember that the deadline is drawing near.
Be Polite & Build Bridges
Almost everyone likes to deal with nice people. Interacting with clients means you’re in a business relationship, so focus on developing good communication and make friends with key people. Maintaining positive relationships with clients may help to resolve issues and possibly prevent them from arising in the future. In addition, studies also show that adding polite language on invoices such as “please” and “thank you” go a long way. Those simple phrases can increase your chances of getting paid by 5%. Good etiquette not only gets you paid faster — it’s good for your brand and image.
Make it Easy for Them to Pay You
Emphasize clear due dates such as net 30, net 60, etc. on each invoice. You can also utilize the word “days” instead of “net”. An interesting finding is that most people will recognize “days” versus “net” and as a result invoices get paid faster. Terms like net 30, net 60, etc. make a lot of sense to business people, but may not be as clear to less business-savvy clients.
Another interesting point is that using terms such as “Due upon receipt” can be left open for interpretation. Having exact terms such as “30 days” seems to focus the client’s mind around a specific time frame and will actually get you paid faster than asking for immediate payment.
If the client expects an invoice from you on the 1st and 15th of each month, then you should deliver your bill on those dates. Having a regular schedule could be the difference between getting paid and not getting paid. Also, review your invoice system on a regular basis. Although it’s easy to get distracted by daily tasks and projects, part of the responsibility in collecting invoice payments is up to you. This means tracking invoices and accounts receivable weekly in order to determine which clients have and have not paid. Ultimately, not every tip will work effectively for every client, so try different tactics to see which ones produce the best results.