- June 10, 2014
- Posted by: Taurus Collections
- Category: Uncategorized
One of the biggest stresses faced by freelancers, small business owners, and other people who work for themselves is chasing overdue invoices and recovering other monies owed to them. In fact, many freelancers report that they spend more time chasing monies owed for their work than actually completing the work at all. Chasing payments is awkward, embarrassing and, more importantly, it’s costing you money! Looking for a few hints and tips on dealing with the problem? Here are a few quick and easy solutions:
Be As Clear As Possible
It’s understandable that occasionally some companies and individuals can struggle to pay their invoices on time, and that that can lead to a large amount of stress and anxiety for them and you. More often, however, the money to pay you is available, but your ability to receive it is being delayed by process and red tape. One way to cut this red tape is to ensure that your invoices are as clear and easy to understand as possible: don’t assume the person in payroll will know who you are and what you’re invoicing for. Lack of information could delay the payment process, leading to unnecessary stress for you. Your invoice should always include your name and company name, all of your contact details, payment terms (usually 30 days) and details, and a description of the work you have carried out. Make it as specific as possible including dates when the work was carried out so that the value you are adding to the business is laid out. This means the company you are dealing with has no excuse not to pay you on time.
Pick Up The Phone
Nothing wrong with your invoice but still haven’t received your payment? This is the part of the invoicing process people generally find the most awkward. Although it requires being more forward than you might like, the best way to deal with this problem is to pick up the phone rather than fire off another email. It is interesting to note that the law says an invoice is late if it hasn’t been paid after 30 days, and that you are able to charge ‘statutory interest’ on any overdue payments- this is 8% plus the Bank of England base rate for business to business transactions. Knowing your rights is important before you pick up the phone to call your client, and you shouldn’t be afraid to assert them. It is also worth having a digital copy of your invoice to hand before you pick up the phone, so that if the payroll department claims they haven’t received your invoice you can email it over whilst they are still on the line. Preparation is key before you pick up the phone: you need to know what you want, when you want it, and what your next steps will be if the company is unable to meet these demands.
Time to Stop
If you remain unpaid after a significant period of time (say, 30 days after the originally payment terms period has expired) and you are still carrying out additional work for your client then it’s time to put a stop on their account, and stop generating work for free. It’s important that you know your worth: Small and Medium Enterprises (SME) like you make up 99% of all UK businesses, and without good cash flow many of these businesses will fail. 44% of young SMEs have run out of cash or come very close: don’t let your business become one of the statistic that fail because someone else can’t organize their cash flow!
Sick of dealing with late or nonpaying clients and want to remove the problem so that you can focus on more important aspects of your business? If you need help in your business to improve cashflow and implement some quick debt collection strategies, please give us a call to see how we can help you out, please email firstname.lastname@example.org or call 0843 309 1633
 “How to recognise and deal with debt stress”, money, http://www.money.co.uk/article/1009742-how-to-recognise-and-deal-with-debt-stress.htm
 “Show me the money: Our guide to payment chasing”, Freelance Advisor, http://www.freelanceadvisor.co.uk/go-freelance-guide/show-me-the-money-our-guide-to-payment-chasing/
 “Bank of England maintains bank rate at 0.5% and the size of the Asset Purchase Programme at £375 billion”, Bank of England
 “Late commercial payments: Charging interest and debt recovery”, Gov.uk , https://www.gov.uk/late-commercial-payments-interest-debt-recovery/charging-interest-commercial-debt
 “Facts and Statistics of Invoice Finance – A Lifeline for SMEs Infographic “, graphs.net, http://graphs.net/facts-and-statistics-of-invoice-finance-a-lifeline-for-smes.html
 “What is an SME?”, European Commission