Have you found yourself in this situation before: your invoice has been sent out to a company for work completed or goods delivered but you’re still waiting for payment. You’ve followed up more than once, called and emailed, but still no funds have hit your bank account? They are a large company with a large AP department, so what’s holding them up?

 

When sending out invoices, it can be confusing when payment is not received timeously. Not only is it frustrating, but it can become awkward to be continuously chasing. It can also be a fine line between sounding rude or following up and requesting what’s rightly yours, and there are any number of reasons invoices may go unpaid.

 

 

Some of these reasons include:

 

The invoice was not received by the correct person

Sometimes invoices are sent either to the wrong department or to the company’s main address without a designated department and it can take some time to reach accounts payable. Always ensure you’ve fully addressed your invoices and, if you’re unsure, make a quick phone call to find out the correct details.

 

The invoice was inadvertently missed

When a company receives a lot of post or emails, there can be times that the odd one is overlooked. This is just one of the reasons why it’s good practice to send invoices out with reminder notes a second, or even a third time, without waiting too long after the payment’s due date has elapsed.

 

The invoice is awaiting approval

Companies will have differing payment thresholds. For some, automatic approvals will be any amount up to £1,000, while for others it can be higher. While still other companies will require each and every invoice to be approved by a head of department or other person in charge. In these cases it can take extra time, especially because the person who is required to approve invoices may have a mountain of other work on their schedule and very often invoices are pushed aside as the lowest priority.

 

New staff

From time to time companies will hire new staff and they will be learning the ropes for the first few weeks or months. If your invoice has gone to a new staff member for processing, it could take more time than usual to process.

 

Some companies just rip others off

This is a sad but true problem and it affects numerous small businesses. A quick search on Google will show pages and pages of horror stories detailing how larger companies have not treated smaller businesses fairly. Unfortunately there are times when invoices just get ignored – intentionally!

 

 

If you’ve found yourself with unpaid invoices, there are steps you can take to improve your chances of payment now, but also to protect against non-payment in the future…

 

 

Issue a contract to every client

After the initial discussion and verbal or email agreement, send your contract out to the client. Include payment terms and description of the work to be carried out. By doing this, you’re not only being clear about your requirements, but also confirming to the client that you will be upholding your end of the agreement. Common payment terms are 50% deposit and 50% balance payment before the goods are delivered, or for freelancers and businesses offering a service, payment upfront is becoming the norm.

 

Set your payment terms clearly

A lot of small business owners require payment upfront. Usually this is because they have experienced the unpleasantness and wasted time of non-payment and having to chase their money. Set your payment terms clearly to avoid any confusion.

 

Don’t let non-payment slide

If you find yourself in the predicament of having an unpaid invoice, don’t just let it go. Many smaller businesses will automatically think that it’s not worth going the legal route due to the expenses incurred, but taking companies to small claims court is the ideal solution in these cases. Another option is to work with a debt collection agency who can chase the payment on your behalf.

 

Get the details of the relevant person in the AP department

If you have the contact name, number and email address for a member of staff in the accounts payable department that you can call on to assist with following up on non-payment, you can save yourself a lot of time and hassle. Building a rapport with this AP staffer can really go a long way to getting invoices paid on time.

 

Setting safeguards like these in place can often mean the difference between waving goodbye to what should have been hard-earned money or receiving timely payment!