7 tips to get your invoices paid quicker

By the end of 2008 over 650,000 businesses were owed money in the form of unpaid invoices, rising dramatically in 2009 to over 1,000,000.

The evidence clearly suggests while businesses are struggling in the economic downturn they are working hard to keep money in their business longer, alas taking longer to settle their invoices.

Listed below is a list of seven tips to help you get your invoices paid quicker. This isn’t a hard and fast process you should adopt with all customers as you will find some tactics work better with some debtors than others.
1 – Credit check customers
By credit checking your customers you will be able to determine how credit worthy they are. Although this doesn’t tell you how quickly they settle their invoices you can pick up on whether they are poor at settling their debts. You should look out for their credit score and whether they have had any CCJs or winding up petitions.

2 – Set Shorter Payment Times
Setting a shorter payment term, of say 14 days, will prompt your customers to acknowledge they need to settle the invoice in a shorter time frame than their normal invoices. Even if the customer doesn’t set your invoices as a higher priority, they will become overdue quicker so you should receive your money quicker.

3 – Chase customers a week before payment is due
One of the most common reasons an invoice is paid late is because it falls outside of a cheque run, i.e. a time when the customers settles a bulk of their outstanding invoices. By chasing a customer a week before payment is due it forces them to think about when they are likely to send you payment.

4 – Allow customers to settle their invoices by both BACS/CHAPS and cheques
Offering a number of payment options could help you receive payment quicker as some customers prefer to pay by methods other than cheque, such as BACS. By offering alternative payment methods and making it easier for customers to settle their invoice you should see some customers paying quicker.

5 – Call customers the day payment is due
Don’t be scared to contact a customer the day an invoice is due to be paid and position the call as a friendly reminder. You would be amazed how quickly businesses settle invoices when they know they are going to be called and ‘nagged’ about it.

6 – Offer an incentive to settle invoices promptly
Another solution could be to offer customers and incentive for settling their invoices early, such as a percentage off the invoice total or preferential rates.

7 – Don’t be shy to call and ask for payment!
Don’t be shy about calling customers and asking when they’re sending payment. If they tell you the cheque is in the post agree a day you’ll call back if you don’t receive it, this could be enough to get them to put a cheque in the post that evening.