How to Manage Your Overdue Invoices

By January 10, 2018News
Accountants in Edmonton

Do you analyze your business accounts and your accounts receivable from time to time? If yes, then sometimes, you might have come across overdue or pending invoices. You might surely have some clients who don’t pay on time creating potential cash shortfalls and stress.  Getting your payments from some customers on time can be a little tricky if they follow the same pattern every time you issue invoices to them.  The challenge of getting your clients to pay in a timely manner can be managed easily. Here are some helpful tips suggested by accountants in Edmonton that will help you deal with your overdue accounts receivable.

Explain Your Terms and Expectations

It is important to explain your company’s invoicing and billing policies and expectations to your new debtors to avoid any confusion or disputes later. Be clear as to your company’s payment policy. For instance, most businesses offer a 30-day payment policy. Also, mention to your clients that if they fail to pay within your payment duration, you will charge interest on the payable amount. Furthermore, mention all other crucial invoicing terms that you have for your clients.

Follow Up and Send Reminders

Follow up with your clients after the service has been provided, the products have been delivered, or the project has been completed. Remind them on a regular basis during your payment grace period. You can either send gentle reminder messages, emails or official reminder letters. Don’t overdo or become too pushy while following up and sending reminders. Repeated follow-ups might irritate your clients. And most important, do not get angry or irritated, or don’t threaten them while following up. Doing so will only spoil your corporate relationships.

Appoint a Staff Member

You might have several things to do as a manager or business owner. Therefore, assign one of your employees or hire an accountant specifically to follow up with your clients, send reminders, and collect payments from them. This will save you a lot of time and energy that you can invest in other important tasks. You will always have one point-of-contact in charge of your accounts receivable.

Offer Discounts and Levy Penalties

For timely clearance of invoices, you can set-up an upfront or an advance payment policy.  Offer discounts to clients who make payments within a short span and levy penalties or interests on late payments. Ensure your clients are aware of these policies as this will be an incentive for your clients to make early payments and save money.

You will always have different experiences with various clients.  Some clients will generally clear their invoices reasonably quickly while others may continue to take their own time to clear the invoices. In any scenario, accountants in Edmonton suggest business owners to stay calm and try to manage their overdue invoices by following the tips mentioned above.