Perhaps one of the biggest issues that certain businesses have is dealing with customers that don’t pay their invoices on time. Whether it’s the odd customer that simply is slow to pay or whether a business has experienced a rash of customers that simply don’t pay their invoices when they come due, this can be extremely difficult for a business. It can cause the business to have cash flow problems and many businesses have had to close down because invoice holders either paid extremely slowly or never pay them at all. Fortunately there is some practical and helpful billing advice that can help a business have the cash flow they need, even when dealing with unpaid invoices.
As it relates to practical advice, it’s usually best to remind the invoice holders of their obligation to pay once the invoices come due and no payment has been remitted. This doesn’t have to be an extremely forceful or combative situation. Sometimes all it takes is a friendly reminder that in invoice has come due for a client to pay.
There are times where a business may be able to help out an invoice holder that is experiencing cash flow issues. Perhaps the invoice holder doesn’t have the money to pay currently. In these situations, if it is affordable, the business may be able to offer an extension or they may be able to break up the repayment of the invoice into smaller incremental payments to assist with a cash flow problem.
Another option that makes a great deal since for many business owners is to contact a factoring company. Factoring companies will provide loans pursuant to a percentage of an outstanding invoice. Once the invoice has been paid, the company can pay back the factor. This gives the business time to continue to pursue outstanding invoices without the pressure of needing the money immediately in order to keep the business open.
In some cases, it’s being inventive and ingenious, such as contacting a factor. In other cases, it’s simply following up, being firm but respectful and sometimes offering invoice owners alternatives when it comes to repaying an outstanding invoice. Regardless, doing these things can help your business with the cash flow it needs to keep the doors open for many years to come.