Unpaid invoices, it’s something that you as an entrepreneur prefer to have to deal with as little as possible. Yet it is a reality. Even before the corona crisis, forty percent of the invoices remained open after due date. Ten percent of that is an outright default and is never paid. Only three percent is written off as unrecoverable. But what can you do as an entrepreneur to get this percentage as close to zero as possible? If you take a number of preventive and thoughtful steps yourself, the chances are much bigger that your invoices will be paid on time.
Step 1: screen new customers
Bringing in a new customer is of course fantastic, but also take the time to see who you are dealing with. After all, you want to work with a stable partner. A quick background check will give you a better picture of your customer’s reputation and financial situation.
Ask yourself the following questions:
- Does the company have a good reputation in its sector?
- Are they easy to find online?
- Where exactly is the company located?
- How accessible are they via email, landline or mobile phone?
- What does the annual balance sheet look like on the website of the National Bank?
- Who runs the company?
- Search for customer experiences on Google or social media.
Step 2: draw up clear terms and conditions
In your invoice conditions you record clear agreements, such as payment methods and terms and what will happen if your customer doesn’t pay on time. You also include the extra costs that are charged for non-payment. Provide these terms and conditions to all your customers. Also state them on the back of your invoice or refer to them via a link if you are invoicing digitally.
Step 3: invoice quickly and correctly
If you have made a delivery of provided a service, invoice quickly and correctly (no later than the fifteenth of the month following the performance). Make sure your invoice contains all necessary information and don’t forget to refer to your invoice conditions.
If you are unable to invoice everything quickly, you can work with a prepayment, interim invoices or advance payments. Talk about it with your customer and make clear agreements. In construction, for example, it is customary to charge an advance as soon as the materials have been ordered. Include those agreements in your invoice conditions.
Step 4: follow up on payments
Follow up your invoices closely and immediately send a reminder when your due date has passed and payment has not been made. If necessary, contact your customer informally by telephone. Do you reminders remain unanswered? Then send an official registered letter of default.
Set up a system of reminders so that you can follow up your invoices easily and don’t miss anything. E-invoicing can be a great added value.
Step 5: seek external help
If you don’t have the time or willingness to chase up unpaid invoices yourself, or your previous efforts have been in vain, it’s time to call in a specialist. At Go Solid you find a fast and easy solution free of charge for your uncontested invoices. Send us your invoice via our website and find out for yourself!
Better safe than sorry. A cliché that certainly applies to unpaid invoices. Be prepared when dealing with unpaid invoices. Go Solid is always there for you.
Looking for more tips & tricks to optimize your invoicing and follow-up process? Download our free e-book now!