Outstanding Invoice – 9 Best Tips on How to Prevent Them
23rd March 2023
Preventing an outstanding invoice, overdue payment or outstanding payment shouldn’t be on the regular task list of a business owner. Sadly, and without warning, this has become a regular occurrence for many organisations across the UK.
Onlineinvoices.com highlighted that around 54% of SMEs expected payments to be paid later than the payment due dates.
If you find yourself in a position where unpaid invoices are becoming commonplace within your business, DCBL can help.
We are the UK’s leading provider of debt resolution. Our one-solution service continues to lead the way within the industry.
From initial instruction to successfully recovering your debt, we provide a seamless solution to our clients.
Continue reading this helpful guide on stopping overdue invoices from affecting your cash flow.
How to Prevent an Outstanding Invoice – Contents
Whilst the cost of living suggests a personal problem, it can also negatively impact business life.
Consumers will be less likely to make impulse decisions as inflation and energy prices rise. The outcome of this is that B2C businesses will obviously earn less.
However, issues relating to payment may also come afterwards. Due to the current crisis, those requesting service beforehand may have issues paying for this.
The economy has been and will continue to be challenging for many business owners across the UK.
Getting paid on time is key to maintaining a healthy cash flow and preserving the future of a business.
Although small businesses will feel the brunt of unpaid invoice payments more than large enterprises, all business types need a recovery method (or even prevention!).
All due invoices deserve to be paid, regardless of excuse or circumstances, and DCBL can help in these scenarios.
Top 9 Tips on How to Prevent an Outstanding Invoice
Here are our top 9 tips to help your business prevent the occurrence of outstanding invoices.
1. Request payment upfront
It goes without saying that the best way to prevent any outstanding invoices is to simply request payment upfront.
This is actually a very common procedure within a lot of businesses, especially if this is the first time working with a particular client.
Not only does this stop any invoices from going unpaid, but it also means the business will be better off having the money immediately.
2. Conduct credit checks before you carry out the work
Credit checking a client before providing a service to them is a good way of knowing whether or not payments will be sent on time.
Like when an individual applies for a credit card, those clients with good credit ratings are more likely to pay on time.
3. Automated invoice payment systems
Investing in automated payment request systems is a handy way to prevent an outstanding invoice. This will send the client or customer an automated invoice and reminder when the payment is due.
A common excuse for failing to pay is not knowing when the payment is due, which should negate these excuses completely.
4. Outline payment terms
As part of a business’s terms and conditions, adding payment terms is advantageous to ensuring payment is on time.
Getting the client or customer to sign these payment terms also creates a contractual agreement which, by law, they must abide by.
These terms can indicate when payment should be provided and if there are any ramifications for no payment within 14 days – 30 days.
5. Introduce outstanding invoice late payment fees
In addition to any payment terms outlined and signed by the client, you can introduce late payment fees.
These are added to the total of the original invoice and act as a deterrent for any clients or customers failing to pay invoices on time.
6. Friendly reminder email
If you do not have the means to implement an automatic invoice payment request reminder, you may want to send a friendly reminder to the client.
As simple as this is, reminder emails from person to person are effective in acquiring outstanding payments.
Plenty of email templates online give off a professional yet friendly tone, all with the intention of showing you are serious about getting the invoice paid.
7. Give the client a call
If your payment reminder template email has failed to produce any payment, it may be worth giving the client a phone call.
A friendly conversation over the phone usually indicates whether they are willing to pay or not. Their tone and how they present themselves should give you a good idea if you need to escalate the situation further.
8. Weigh up your recovery options
If you have tried your best to prevent outstanding invoice payments, you may feel you have nowhere left to turn. It may give you peace of mind to know that many options are available for recovery.
Many may simply choose to abandon the debt due to fears it may take too long to recover. Others may choose to go straight for legal action, however, in some cases, this can be more expensive than it is worth.
9. Instruct DCBL to recover your overdue payment
The best way to recover your unpaid debts is to use professional debt collectors, such as DCBL.
Using a debt recovery agency to recover any outstanding payments lets you focus on doing what you do best – providing your services.
Businesses can continue their growth whilst a specialist agency works in the background to recover the money they are owed.
DCBL continues to recover millions of pounds worth of debts for our clients, maintaining a 98% client retention rate.
Our recovery solution is 25% more effective than our competitors, ensuring only the best service for our clients.
If you are serious about recovering outstanding or overdue invoice payments, contact DCBL today for a free quote!
