How are you invoicing your clients? Are you using Google Sheets or MS Office to generate your business invoices or a free invoice software for Mac, iPhone, or Android? Well, 50% of the unpaid invoice problem arises out of how you have invoiced your client. So, if you aren’t using any billing software, then first register with an ideal invoice software for Mac to prevent the issue of unpaid invoices.
Let me take you to a hypothetical situation that will help you understand the motive for preventing the problem of outstanding invoices.
Imagine you have delivered your service to the client and have issued an invoice mentioning the last date for the payment with bank account details and payment terms.
You have sent a reminder, and still the invoice is unpaid.
What will you do?
Your answer will be ‘legal action.’
But it will involve a lot of time and procedures.
So, it is always best to go for proven tricks to avoid the issue of unpaid invoices.
Let us move ahead with the blog, where we will help you learn how to reduce overdue in business or self-employed professions.
What are Unpaid Invoices?
Unpaid invoices are outstanding invoices that remain unpaid after the due date and multiple reminders. Overdue invoices are calculated in accounts receivable while preparing the balance sheet.
Unpaid or outstanding invoices affect the AR ratio, thereby affecting the financial health of your business. Hence, companies must pay attention to unpaid invoices by getting them paid on time.
5 Kickass Methods to Handle Unpaid Invoices
Worried about the invoices not being paid yet? Well, here are some kickass tips to follow for managing your outstanding invoices. Let’s discuss this in detail.
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Send Friendly Reminders via Text
One of the best ways to tackle unpaid invoices is by sending friendly reminders to the client’s phone number via texts and calls. Keep the reminder quite friendly, as offensive words can hurt the sentiments of the client in a genuine case.
Also, mention the invoice number in the reminder to help the client quickly refer to the invoice you are talking about.
Here is a friendly reminder text format that you can use for invoices not paid.
Hey (Name),
How are you?
Just a quick reminder that the invoice for November (Invoice No 487) is due for receipt. Please proceed with the payment; the link is mentioned in the invoice.
I appreciate your attention to my text.
Thanks,
XYZ
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Charge Late Payment Fees
Another way to recover for the unpaid invoices is by charging them late payment fees. If your invoice is left unpaid for more than 7 days past the due date, you must start charging them the late payment fees for every month, which can trigger them for payment.
Also, mention the same in the invoice about the late payment fees so there isn’t any scope for conflict while you charge them for the late payments.
Use professional billing software for Mac or Windows that allows you to add the additional invoice terms at the bottom of the invoice. Also, this invoice software for Mac and Windows helps to send payment reminders directly from the application, making it easy and quick for you.
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Allow Credit Card Payments
Many business owners are limited to accepting payments from multiple methods for which their invoices remain unpaid. Hence, one of the best ways to handle the invoices not paid is by allowing the clients to pay via credit cards.
Credit cards help your clients to take some credit from their bank for settling payments, which can help to clear your invoice. Hence, allow credit card payments to get your outstanding invoices paid.
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Send an Unpaid Invoice Email
While you have sent a text reminder, and your invoice remains unpaid after a matter of 2-3 working days, it is the right time to shoot an unpaid invoice email. Your email has to be very straightforward and detailed, emphasizing to the client the invoice payment that is due for receipt after sending reminders.
Here is a quick format you can use while sending an unpaid invoice email.
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Take Legal Action
Taking legal action for an unpaid invoice is the last resort, especially when you owe a considerable amount of money from the client. So, consider this tip when you are really looking forward to your client paying you a handsome amount after filing a complaint in an invoicing court.
Legal action can take time and some pennies from your pocket as you hire a lawyer and undergo certain legal formalities, but in most cases, it helps to get paid. Also, if the amount isn’t too huge, it is best to take your client to the small claims court and get your outstanding invoices paid.
How to Prevent Your Business from Unpaid Invoices?
It is essential to prevent your business from overdue invoices because unpaid invoices can affect your business’s cash flow and lead to significant financial conflicts. Here are some practical ways to prevent your business from the problem of overdue invoices.
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Use Online Billing Software
Many businesses don’t use online invoicing software to create accurate invoices. They directly generate an invoice on their Word, Excel, or Google Docs, which is awful in 2023! Your business needs to have an ideal invoice software for Mac, Windows, or any other device for creating and sending professional invoices.
How Does an Online Billing Software Help?
An online billing software helps to generate quick, professional, and accurate invoices for your clients in minutes. An online invoicing software has readymade invoice templates that save time in generating an invoice. A professional-looking invoice is created in less than a minute, which helps to issue prompt invoices to your clients.
Above all, having billing software offers many other benefits to your business, such as estimate creation, credit note generation, purchase order creation, time tracking, and more. Hence, your business can do much more than generate an invoice by investing in online invoicing software.
Professional-looking invoices are the best way to prevent the issue of outstanding invoices. It helps with clarity for your client, and an accurate invoice is always cleared on time.
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Accept Multiple Payment Methods
Well, suppose you are really worried about how to reduce overdue in business and are planning to prevent the issues of overdue invoices in the future. In that case, you must start accepting payments from your clients via multiple payment methods.
Again, investing in the right online invoicing software can help you accept payments from multiple payment methods such as debit cards, credit cards, UPI, digital wallets, and more to refrain from the issue of overdue payments.
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Know Your Client Well!
The best way to prevent unpaid invoices is by running a thorough check on your clients before moving ahead with them. If the record hints towards some faulty reviews or late payment complaints, then it is better to issue an invoice for 100% advance payment before taking their work on hand. It is better to avoid working with clients or businesses with lousy rapport to prevent further issues in payments.
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Mention Invoice Terms
Most freelancers or self-employed professionals complain about delayed payments or outstanding invoices because their invoices aren’t perfectly crafted. For the same, using online billing software helps in creating perfect-looking invoices.
The software-generated invoices also help in mentioning the payment terms, adding business signatures, and turning on payment reminders.
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Offer Early Payment Discounts
One of the best ways to prevent overdue invoices is by offering attractive discounts to clients if they pay the invoice before the due date. How about imposing a condition where you offer a 10% discount for payments before the due date? These kinds of offers attract clients with monetary benefits and trigger them to pay faster.
Use an online billing software that can help you add some terms to an invoice, mentioning early payment discounts and other attractive offers.
Conclusion
Outstanding invoices can be prevented if you have applied the right tricks at the right time in your business or profession. Nevertheless, having a digital billing system will help maintain the legal records of your sale, thereby enhancing the chances of claiming legal action against your client for unpaid invoices. Look forward to the best online billing software to keep your business’s financial system smooth and easy-going.
