October 21, 2019Late Payments
Collecting payment on a job/project you have worked on can be a difficult task at times.
However, most of the time these delays happen because of simple misunderstandings and poor communication. A quick phone call can clear these things up.
Although sometimes a phone call isn’t enough. Here is what you can do to get your payments into your account.
1. Review Your Terms In Your Contract
First things first, if you have a written contract go over your payment terms and check your payment conditions and debt recovery options you have in place.
Make sure everything is 100% clear to your customers. If you are relying on a verbal agreement and a handshake then you are putting yourself at risk of miscommunication and a failed payment.
2. Send Constant Reminders
A lot of invoices that are left unpaid are due to people simply forgetting about it. People get busy with day-to-day life.
Most businesses send reminders to their customers once the invoice is already late. By sending reminders (via email or text) before the payment is due you will keep the payment fresh in the customer’s memory and increase your chance of collecting payment on time.
3. Put It In Writing
If your customer isn’t responding to any of your reminders or phone calls, state the debt owed in writing and send them a letter of demand.
To make this more effective, hire a lawyer to draft up a letter of demand. This may prompt a faster payment to you.
4. Outsource To A Debt Collection Agency
If you still haven’t received payment after sending reminders and a letter of demand to your customer, consider hiring a debt collection agency.
5. Take Legal Action
If all else is failing, consider taking legal action.
Depending on the amount of money you are owed, taking legal action may be your best option. You can get advice or lodge a claim with the Small Claims Tribunal here.
Payment Shouldn’t Be Difficult. Why Not Try Another Alternative?
So, all else has failed and going to court is probably not in your best interest. Surely you have other options?
Well, using a platform such as Pencil can help you get your invoices paid faster and also recover debt from customers who aren’t interested in paying you back.
We have seen our users collect 80% of their invoices in just 5 business days!
I won’t bore you with too many details but if you are interested in this, click the button below for more information.
If you have a Xero account, we allow easy integration and will automatically collect your invoices for you!