Chasing down invoices can feel like a second job. You shoot off emails, send follow-up reminders, or even enforce late fees, but you’re still waiting for the money to come through. And, when your client chooses to mail you a check, these challenges are only magnified.
What can small businesses do when staying on top of cash flow can be the difference between success and failure?
One of the most important things is to communicate and agree on the nitty-gritty details before you start the work. For example, will you send one invoice after the services have been rendered or will you use a recurring invoice that will automatically bill clients? Who is your main point of contact (on the client side) for invoices?
Once you’ve answered these essential questions, it’s time to find a new way to manage the payment process itself.
Do you create a new invoice every month for each client, manually entering updated data and information?
Using an intuitive invoice editor, you can upload your logo, choose which contact to bill, set the due date, and add line items. Then, when you connect your bank and use Keap Payments, you’ll be able to accept American Express, Visa, MasterCard, and Discover directly through the app.
Net 30 is the most common invoicing payment terms used by small businesses. It refers to the amount of time — 30 days — that the client has to pay you. While 30 days is the standard, you could also have net 10, net 15, or net 60 terms.
Whatever you choose, it’s rare that a client will actually pay you exactly on that 30th day, especially if they mail you a check. As a common courtesy, wait three business days before following up on the invoice. It may take a few extra days for the mail to be delivered or for the funds to move banks, so add a bit of cushion to your payment terms.
Also, be sure to clarify what net 30 truly means before you sign the contract. Most clients understand that the 30 days begin from the date the invoice was issued. However, other clients may think it begins when the invoice was actually received or when the services were delivered.
If you’re still waiting to be paid, send a past due notice via email. Make sure your message remains respectful and polite. Don’t assume anything at this point — simply remind your client about the invoice and ask when you’ll receive the money.
Keep your email short and sweet. Remind your client about the available payment methods and reattach the invoice for easy reference.
Here’s an email template you can use to remind clients that your invoice is overdue:
Subject: Invoice [invoice reference number] OVERDUE
Hi [First name],
Invoice [invoice reference number] for [$X] is [X] days overdue. Please send payment via check, credit card, or [other method] as soon as possible.
I have reattached the invoice for reference. Please reply to this message and let me know if you have received it.
If you don’t get a response after two full business days, pick up the phone and call your client. It’s much harder for clients to ignore a payment request when you’re talking to them. Ask your client why the invoice hasn’t been paid and set clear expectations for payment — for example, perhaps you will not take on any new work until payment has been received.
Invoice management can be one of the less appealing parts of running a business. But, it doesn’t always have to be a headache. With digital payments and billing software, you can increase the chances of getting paid faster, saving you weeks of manual, repetitive work. Think of everything you can do with that extra time!
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