1

4 Ways To Avoid Late Payments

When invoices go unpaid, this leaves your business at risk of having poor cash flow. By implementing proactive measures, you can significantly reduce the risk of overdue payments. Here are our 4 top tips to avoid late payments.

Check that your customer has received the invoice

Don’t hesitate to follow up and ensure your customer or client has received your invoice. Sometimes, invoices get lost in spam folders or overlooked amidst busy schedules. By checking in, you show that you’re attentive and professional.

 

Remember, maintaining open lines of communication reduces misunderstandings and fosters better relationships with customers whilst minimising overdue payments down the line.

Chase up overdue invoices immediately

When you notice an overdue payment, don’t delay in following up. The sooner you address the issue, the better your chances of receiving what’s owed.

If there’s still no response after your initial outreach, consider escalating the communication. A more formal tone may be necessary to convey urgency without jeopardizing the relationship.

By staying proactive and engaged in this process, you establish yourself as someone who values timely payments while keeping customers aware of their obligations.

Target customers with a history of late payments

Identifying customers with a history of late payments can save you time and frustration. This proactive approach helps you manage your cash flow more effectively.

Start by analysing past transactions. Look for patterns in payment behavior. If certain clients consistently miss deadlines, they may require closer monitoring.

A great way of streamlining this process is by signing up to credit monitoring websites such as Experian. This way you can keep track of and monitor your client’s credit score in one place. If a client’s credit score changes you will be alerted and internally you may wish to reduce their credit limit to protect your own cash flow.

Instruct a third-party debt collection agency

When late payments become a persistent issue, it may be time to consider professional help. Instructing a third-party debt collection agency can relieve some of the stress associated with overdue payments and unpaid invoices. These agencies specialize in recovering debts efficiently and effectively.

The advantage of using such services is that they often operate on a “no win, no fee” basis. This means you only pay if they successfully collect your outstanding balance. It’s an attractive option for many businesses facing cash flow challenges due to unpaid invoices.

Guildways are UK & International debt collection specialists with over 25 years of experience. If you would like to discuss a debt you have, please feel free to contact us by email [email protected] or by telephone at 03333 409000.

23 Oct 2024