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Invoice Payment Terms
When first getting clients on board it is essential that you insert invoice payment terms into a contract. This can legally protect your company and allow it to take action if invoices are not paid or are paid late. It can be hard to make clients pay on time, but if you set out your invoice payment terms from the start and create payment terms that are achievable and suit your business, then there is less chance of you having to wait for payments.
Accepted Payment Methods
Invoice payment terms used to be lengthy, between 30 and 90 days, as the process took a lot longer. As the majority of invoices are now paid online, even a 30-day payment period is too long. Offer as many payment methods as you can, including online, credit cards and cheques, along with in various currencies if you have many international clients. The easier it is for them, the quicker they should pay.
Late Payment Penalties
Insert late payment penalties into every contract with a client. You can legally claim interest and debt recovery costs when a payment is late after 30 days. The overhanging threat of a client having to pay more should they be late with their payment should encourage them to settle all invoices on time.
Speed Up the Invoicing Process
Send out invoices as soon as possible. The quicker a client receives an invoice, the faster they are likely to pay it. Seeing as most are sent online, this is easier than ever. Using accounting software to automatically send them out is a great way to streamline the process as well.
Be Clear and Concise
Set up an invoice template that can be sent to every client. This will save time when filling them in and if every one is the same each week, month or quarter, clients should get used to filling them in. Make it clear to understand and obvious which areas the client must fill in.
Follow these tips and you should find a lot more of your invoices are paid on time, creating a much better cash flow and financial prospects for your business.