Slow Paying Accounts – Deal Wisely

Working with slow paying accounts can be very challenging. You make deliveries today and three months later the invoice still hasn’t been paid! For a small business that relies heavily on cash flow, this can put you in a precarious position that can jeopardize your ability to meet your daily operating commitments.

Last Updated by NickJonas on Wednesday, 27 May 2020 – 01:10pm

So, how do you make sure that your clients pay in a timely manner?  For starters, you need to put everything in writing.

Slow Paying Accounts - Deal Wisely
Slow Paying Accounts –  can put you in a precarious position.

You can’t hold clients accountable to payment terms you haven’t put in writing. They can say they didn’t get your invoice and you can’t prove otherwise.

So, if you’re requesting payment in three weeks, state that clearly in the contract.

Jack Stieber is the president of American Receivable, an accounts receivable factoring company based in Dallas, Texas.

He says the key to ensuring your clients pay in a timely manner is to put everything in writing to ensure there is no question about your payment terms.

Here are some other things you can do to avoid slow payments.

Send invoices right away

The clock only starts ticking when you submit your invoice. If you delay in submission, it will take even longer to get paid. For this reason, as soon as you complete your job (or deliver goods), submit your invoice.

Itemize the invoice

The invoice should be as detailed as possible without being confusing. A detailed invoice clearly outlines all completed work or products sold. A confusing invoice, on the other hand, may bring payment processing to a halt.

State payment terms in the invoice

First, ensure that you’ve clearly stated payment terms in the initial contract. Then, remember to highlight the terms in every subsequent invoice you send. Maybe it’s been months since the client reviewed your contact. Reminding them of those terms in the invoice can be invaluable.

Practice situational invoicing
Many companies prefer to pay multiple purchase orders in one check rather than writing a check for each purchase. To take advantage of this trend, for clients requesting a purchase order, try to send all invoices at once.

Build relationships with your clients
It helps to bond with the people responsible for bill paying. Learn their names, and if possible meet them in person, and even send them birthday cards. People who know you at a personal level will often go out of their way to make sure you’re paid in time.

Don’t be afraid to call them if necessary
Never send email messages about late payments when it is accounts that slow paying  obviously. No one reads those types of emails.

If you feel you need to make contact, make a personal phone call. Be friendly and start the conversation by confirming they received your invoice on time.

At the end of the conversation, ask them to give you a definite payment date.  It’s also a good idea to follow up with an email that restates the understanding you have reached and includes the payment date they agreed to.

These are the some key points to deal wisely with slow paying accounts.
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