5 Ways to Get Unpaid Invoices, PaidLets Get Started
AUTHOR: Kim Miller
Unpaid invoices can be the bane of an entrepreneur’s existence. You have to waste valuable time and resources politely chasing after people who owe you money.
This is one of the most time-consuming and frustrating parts of small business accounting. Partly because you may even feel like you’re in the wrong sometimes. You may not want to press them or “nag” them. You also never want to be too aggressive, and possibly alienate the client. That could cost you future business.
But like anything in business, there are proven methods to treat this pain.
Here are five ways to get your outstanding invoices paid up quickly and painlessly.
Make Sure You’re Organized
This is always the first and most important step. You need to stay on top of all of your invoices, both paid and unpaid.
There are still people who prefer the old-fashioned analog paper-based way of keeping track. However, using an accounting system like QuickBooks online can actually help you spend far less time on things like this, so you can focus on the activities that actually make you money.
You can have easy access to all of your invoices, at all times. It’s cloud-based, so you can even check a status or send a reminder from your phone.
Always Get it in Writing
As an entrepreneur, you may be tempted to do things on an informal “handshake” agreement. Yes, that does help you close sales quickly, but it can lead to problems down the line.
Obviously, without a signed document, it can be difficult to get the money you were promised from an overdue account. It can also lead to ambiguity on the actual terms or deliverables.
It’s best to politely suggest that you get things in writing if you’re ever offered a handshake deal. In most cases, people will agree. If they don’t agree, this could be a red flag that this isn’t somebody you want to work with anyway.
Let Them Hear Your Voice
A lot of the time, automated reminders from a program like QuickBooks can help you catch up with an overdue account.
But if that doesn’t work, the next step is still the old-fashioned phone call. Even though this is an escalation, you can still do it politely and with a friendly tone. You can also suggest a payment plan or some other arrangement, if this is something you’re in a position to do.
But, if the confrontation of a phone call or escalation is something that you’re really not comfortable with, you can hire a personal assistant or even a debt collection specialist to do this for you.
Turn it Over to a Debt Collection Agency
Once you reach the 90-day point, you may really get the sense that this money is going to be difficult to recover. At that point, if the person has been difficult or unresponsive, you’re fully within your rights to turn the matter over to a professional collection agency.
Most of these agencies charge about 15 – 25% of the money owed to recover the debt for you.
Failing that, the next step in escalation is taking the person to small claims court. This can obviously be an expensive and time-consuming process, so you will only want to do this for a larger sum of money.
Most of these courts deal with amounts over $25,000. But, if somebody owes you that much money, it’s in your best interest to explore this step, if need be.
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