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If you’re a business owner, then you know that chasing overdue invoices is an important part of staying afloat. Not only does it help to keep your cash flow healthy, but it can also have a negative impact on your debt collection rates if you ignore them for too long.
In this blog post, we will discuss three top tips for chasing overdue invoices in a timely and effective manner.
Set Expectations & Charge Interest
As a business owner, you should be aware of the fact that debtors may not always pay up as soon as they’re supposed to. In order to offset the costs of chasing overdue invoices, it’s important to set expectations and charge interest on late payments. This will help to ensure that you’re not out of pocket any more than you have to be, and it can also act as a deterrent for debtors who are on the fence about paying up.
Include interest provisions in your contract. Thanks to the Late Payment of Commercial Debts (Interest) Act 1998, you may do this as permitted by law.
This legislation allows you to claim an interest rate of the current Base Rate plus 8% on overdue bills. This can act as a deterrent however the good news is even if it is not detailed in your contract terms you can still charge it.
Finally, double-check that the information you put on your invoice is correct.
Send a Reminder Email
Once an invoice is overdue by more than 30 days, it’s time to send a reminder email. You can do this by creating an email template in your debt collection spreadsheet and then copying it into each customer’s debt sheet when you send them their first reminder message about their debt obligation to pay up within 30 days of receiving the invoice.
If they haven’t paid yet. Send another email after 60 days (or 90 depending on how many debt collection emails you want to send).
Finally, if there’s still no payment after 120 days of receiving the debt collection email then it may be time for debt collectors!
Seek Legal Advice & Mediation
When it comes to money owed and the cash flow health of your organisation, it’s just a part of business. It may be intimidating or overwhelming to seek legal assistance. However, when it comes to financial obligations and your company’s cash flow, it is unavoidable.
If you’ve sent multiple reminder messages and still haven’t received any payments from your debtors after 90 days, then it may be time to use debt collectors. This is where debt collection agencies will take over the debt recovery process on behalf of your business by sending letters or calling debtors in order to get them to pay up as soon as possible.
Here at My Debt Recovery, we offer a range of different debt collection services including our “no collection, no fee service”. This means that if you don’t get paid, neither do we.
Struggling to Chase Your Overdue Invoices?
Chasing late-paying customers can take a huge amount of time and resource away from your business.
By engaging with My Debt Recovery, we can take the stress away. Allowing you to refocus your attention back on what you do best; growing your business.
Ignored invoices won’t pay themselves! It is time to take action and get your debtors to pay up.
Drop us a line and we can help you get paid!
