#Unpaid invoices small business software

Small business owners should send email reminders seven, 14 and 21 days after the invoice due date – this can be automated through most bookkeeping software for convenience. “My typical course of action is sending an email reminder, and I’m pretty lucky because the majority of the time they pay on the first one.” “Often for my business, invoices that aren’t paid are a result of circumstance due to third party factors,” Hargreaves says. When chasing up late payments, Hargreaves says you should have an open discussion to get to the root of why an invoice hasn’t been paid. Send remindersĪ gentle reminder is typically all that’s needed for clients to pay their invoices. For example, consider how offering your clients the option to use BPAY™ instead of a direct debit or over the phone payment might help you receive payments.įind out how ANZ can help you make it easier to receive payments. Providing clients with a few different ways of paying their invoice might also help. “It helps me keep on top of outstanding invoices by reminding me when they become overdue, which is a great reminder for me to follow up,” Hargreaves explains. For Michelle Hargreaves, who owns trade services business That Ladie Tradie, sending online invoices means she can keep track of payments through a mobile app when she’s on-the-go. Giving clients a simple, straightforward way to pay invoices online can encourage on-time payments, while also helping small business owners keep track of their finances. We suggest including a clause that any overdue invoices by 30 days or more will be sent to debt collection and their fees, and commissions and charges will be added to any monies owing.” Make it simple “Always get these signed by the customer: word of mouth is not enough if push comes to shove. “Sadly business owners have to prepare for the worst, and terms and conditions or an engagement letter with clear payment terms are a must these days,” says Price. Make sure your contracts and invoices have clear payment terms in writing from the outset, and you can avoid any ambiguity or confusion when it comes time to be paid. So how can small business owners protect themselves against unpaid invoices? Here are a few ways to chase up late payments: Put it in writing “One big client not paying on time means business owners need to dip into personal savings to fund the gap.” “Most small business owners start their business with limited cashflow and operate on the smell of an oily rag,” Price says. Stacey Price is a financial coach at Healthy Business Finances, and she says unpaid invoices can cripple the cashflow of small businesses. On average, Australian supplier invoices are paid 26.4 days late, making them some of the worst payment times in the world, according to a 2017 inquiry into Payment Times and Practices. For small businesses, an unpaid invoice can turn a profitable month into one where you’re struggling to keep the lights on.