Invoicing Mistakes To Avoid If You Want Fast Payments From Clients
Whether you’re a small business or a large corporation, you’re going to have to send out invoices to your clients and customers. Even with a dedicated accounts receivable team, there are mistakes that happen far too often when it comes to invoicing clients. When these mistakes happen, your payments are often delayed, which directly impacts your business.
At Capstone Collections, we’ve helped countless clients recover unpaid balances from their clients and we’ve seen the kinds of the mistakes that businesses often make. If you want your clients to pay on time, here are some of the top invoicing mistakes to avoid.
When you’re delayed in getting your invoice sent to your client, it’s only going to delay your payment further. Even if the client is typically a fast payer, if it doesn’t get to them on time your payment isn’t going to get to you on time. Sending out your invoices on time should be a top internal business priority.
If you’re a small business with limited staff and a lot on your plate, sending out an invoice can easily be forgotten. It’s important to have a system that reminds you to send out an invoice to your clients after you’ve completed a project. Something as simple as setting a reminder on your calendar will help get your invoice schedule back on track.
Unclear Payment Instructions
Another common issue, most often seen in small businesses, is the lack of clarity when it comes to the invoice itself. The charges might be itemised and very clearly laid out, but there isn’t clarity when it comes to how to pay the invoice itself. Should they pay via card? Should they issue an electronic check? If you don’t give specific instructions on how to pay the invoice, your clients may not pay on time.
Errors On the Invoice
Before sending out an invoice, be extremely thorough when it comes to invoice reviews. If there are any mistakes on the invoice, it will most certainly cause delays with the payment. Not only will it cause delays by having to issue a new invoice to your client, but it may cause you to lose some trust with the client as well.
If this invoice is incorrect, how are they to know that any future invoices will be correct? It doesn’t take much time or effort to review an invoice before sending it out, but we promise you that it’s more than worth it.
Lack of Follow Ups
In the event that your customer isn’t paying, it’s important to follow up with them directly about the missed payment. Maybe they’ve forgotten about the invoice and a simple phone call will resolve the issue. Or maybe they’re avoiding your calls and not communicating with you. By following up on your unpaid invoices, you’ll be able to create an action plan for those that aren’t paying.
Lack of Payment Options
Small B2B invoices will typically benefit from multiple payment options. The more payment options you allow, the better chance you’ll have at getting paid quickly. If you limit your payment options to one or two methods, some businesses may not be able to pay the invoice as quickly while they establish the infrastructure on their end to pay it.
Mistakes happen, but when it comes to having your invoices paid, it’s important to try and reduce as many mistakes as possible. If you’re in a situation where your clients simply aren’t paying, it may be time to involve Capstone Collections.
For more information on how we can recover money owed to your business, contact the team at Capstone Collections today.
Creative Ways to Collect Unpaid Invoices
Regardless of what industry your business is in, there are going to be times when invoices owed to you become past due. No matter the reason, getting past due clients to pay overdue invoices is often a job in itself. You send reminders and try to contact debtors, but they just aren’t paying – what else can you do to get the money you’re owed?
If you’re not having any luck with contacting your debtors and using typical debt collection methods, there are some creative solutions that you can try. At Capstone Collections, we know how different each debtor can be, and different tactics might work better with different debtors. Here are some creative things that you can try to collect unpaid invoices.
Alternative Payment Options
If your debtor is having difficulty paying because they are low on cash, you may want to consider an alternative payment option. Do you need specific inventory or products that your debtor’s business offers? Do they have the ability to offer you stock in their company as a form of payment? There are more ways to be paid for debts, and depending on the situation, alternative payments may be an even better option.
You shouldn’t offer alternative payments to all customers that owe you money, and you should always focus on collecting monies owed versus other payment options. Work with your debtor to understand their situation and work through creative payment solutions.
A great way to get your invoices paid is to offer an incentive for paying the
invoice. Offer a discount or other incentive for paying off the invoice entirely or making payments by specific dates. Discounts may not be ideal if you’re relying on the full amount to be paid for your business, so you may want to try other tactics to get clients to pay invoices.
Offer promotional prices on additional purchases, or potentially provide a freebie on their next purchase by paying their entire invoice by a specific date. Many times it isn’t a lack of funds that limit a client from paying, it’s often lack of motivation. Giving clients a bonus or incentive can give them just the motivation they need.
Offer Payment Plans
Payment plans are more common than some of the other tactics on this list, but they are also very effective at getting your invoices paid. Instead of requiring a large payment up front, allowing your clients to break up the payments will make it much easier for them to pay off the invoice.
Work with your clients one on one to understand their unique financial situation. Some clients may need just a few months, while others might need a year or more depending on the size of the invoice. Communicating with your clients builds good relationships, meaning they may be more willing to pay their invoices on time.
Switch to a Retainer Schedule
You may want to switch to a retainer billing model if your business can support it. By having your clients pay the same amount every month for a set list of services, it makes it easier for your clients to plan around the invoice.
Nobody likes unpaid invoices, and at Capstone Collections, we have the tools and resources to help you collect the money that you’re owed. If the tips we reviewed here don’t work, it may be time to involve a professional collection company.
Don’t let your business suffer because your clients won’t pay their bills. Working with your clients and fostering open lines of communication are two important steps in building lasting relationships with your customers.
For more information on how Capstone Collections can help you, contact us today.
Signs It’s Time to Involve a Collection Agency
Your business relies on timely payments from your customers and clients. When your customers aren’t reliable with their payments, it hurts your bottom line. Whether accidental or intentional, missing payments will not only have consequences on your business, but can have major consequences for those customers who are simply unwilling to pay.
If you’re tired of waiting around for your customers to pay, hiring a collection agency is worth considering. Founded in 2017, Capstone Collections uses effective debt collection methods to get you the money you’re owed. Here are some of the top signs it’s time to involve a collection agency.
Multiple Missed Payments from Multiple Customers
If you notice a trend of multiple missed payments from multiple customers, it’s time to get
involved. What may start as just one or two customers that have missed payments can quickly turn into a large-scale problem for your business. Unreliable payments can put your business at risk for financial problems, so getting your customers to pay on time is a crucial part of your business’ success.
Have a dedicated member of your team regularly check your accounts due to ensure payments are submitted on time. Staying on top of communication can mean the difference between an on-time payment and multiple late payments.
You Have Unpaid Invoices Older than 60 Days
The longer an account goes unpaid, the more you lose on the unpaid invoice. If you don’t have payment in 60 days of the completed sale or service, that may be a red flag. The more accounts that you let go past due, the less you earn for your business. If you’re not regularly reviewing your accounts and how far they go past due before you receive payment or write them off, the time to start is now.
When you have customers who are simply unwilling to pay on time,
. Our skilled team members can help you collect the money you’re owed and can give you tips and resources to get your clients to pay on time.
Lost Contact with a Client
If you have a customer who vanishes into thin air, it’s time to call a collection agency if they have outstanding balances. When customers actively avoid calls and emails, they know that they’re skipping out on paying their invoice. In fact, there are some who will go so far as to change their contact information and address to get out of paying.
You need a dedicated team that can help track down those that owe you money. We offer field call services to verify contact and residence information, and will reach out to those that owe you money to find out why they’re not able to pay.
You Don’t Have a Standard Contact Timeline
A standard contact timeline is essential for reinforcing good payment habits from your customers. Be clear and concise up front when discussing payment terms and conditions, such as the price, when you expect to be paid, and the method of payment.
Remind your customers before the sale is completed, then set up regular intervals to contact the customer after the sale is completed if necessary. Where many businesses fail is consistent followup. We can help you set up an effective contact timeline to follow with all of your customers.
When customers don’t pay, it hurts your business. Regardless of why a customer is unable or unwilling to pay, the team at Capstone Collections is here to help. For more information on how we can help you and your business,
the team at Capstone Collections today.
Choosing Your Debt Collection Agency
Do you struggle with getting your clients to pay? Are you wondering how you can get them to pay without having to take the issue to court? We understand how you feel. It can be a stressful time when you need to be paid and someone is refusing to do so.
Below, you can read all about choosing your debt collection agency.
This is the first thing you should look for in a debt collection agency. A debt collection agency that has experience in the industry typically understands what tactics work and which ones don’t. Someone who doesn’t have experience might not get you the help you deserve, which means you spent money on a debt collection agency for nothing.
There’s a difference between debt collection and harassment. When someone feels like they’re being harassed, they can rightfully press charges and take the collection to court, so understanding the various collection laws and regulations is important. When you choose a collection company with a lot of experience, they’ll know what they can and cannot do when it comes to collecting the debt you’re owed.
A debt collection agency with experience will ensure that your money is returned quickly and without much struggle. They’ll have experience in different situations so they’ll be better equipped to handle yours. They understand that all situations are different and they’ll have respect for yours.
When people are satisfied with a business, they’re more likely to leave reviews for it. You should look for a debt collection agency that has positive reviews. Of course, it’s not realistic to see debt collection reviews that are all positive, so a few negative reviews should be expected.
That said, you should use your own judgement in this case. If you see that a company has many bad reviews, you should be wary of it. While every company will have bad experiences with certain clients, a lot of bad experiences says a lot about the company.
You should also look for reviews from clients of the debt collection agency rather than the reviews from the consumers that have the debt that is trying to be collected. Nobody likes to be contacted by a debt collection agency so there may be many negative reviews from those who have a debt that is owed.
How Much You’re Charged
Usually, a debt collection agency will charge you a percentage of the money that they retrieve for you. For some, this can be 10% of the money you get back and for others, it’ll go up to 30%. We charge a fair rate for our debt collection services and we have years of experience in the industry.
How much you pay depends on a variety of factors, with some collection agencies tacking on additional hidden fees when the collection is complete. With us, you’re going to get an upfront, honest summary of the fees and charges so there are never any surprises. We believe in getting you the money you are owed without charging you unnecessary fees.
company to get the job done. That’s because while you might need your money back, there are agencies who will try to cheat you. When choosing a debt collection agency, look for a company with experience, good reviews, and a fair price. With us, you’re getting all three. Our goal is to provide the highest-quality debt collection services for competitive prices.
How to Avoid Customers Who Don’t Pay
Do you own a business? Are you tired of having customers who avoid paying? If so, we know the struggle. People will always attempt to get out of paying their bill, which is why you might be trying to find new ways to avoid these customers in the first place. While it certainly can be a frustrating ordeal, there are plenty of ways to help prevent it from happening in the future.
Here are our best tips for avoiding customers who don’t pay.
Get Their Signature
The first thing you should do in order to prevent customers who don’t pay is have them sign a contract, if it’s appropriate for your line of business. That’s because when they do, it’ll be legally-binding. Once you have their signature on a contract, you can pursue them in court when there are unpaid fees.
If you warn the client ahead of time that there is a clause in the contract which requires them to pay these fees, they’ll be more likely to pay on time. Creating a contract is the best way to prevent people from avoiding their fees.
Call a Collection Agency
When you’re unsuccessfully with recovering the money your client owes you, you should consider hiring a collection agency. The experts at Capstone Collections can help you when your clients or customers don’t pay. Remember, you should only do this if the unpaid fees are less than how much it would cost to hire the collection agency.
A collection agency will make it their duty to get your money, which is one of the many benefits to using these services. You can carry on with your own business having peace of mind that you’re being taken care of.
Hire a Lawyer
If you have their signature on a document that states your customer has to pay for certain services, you can easily hire a lawyer. The lawyer will be able to handle your case because he or she has experience in this field.
You should be aware that a lawyer is more expensive than a collection agency. You should hire a lawyer if the unpaid amount is more than the lawyer fees, or if you truly think that you need legal help to get your money.
Don’t Give Up
When you first notice that the customer is refusing to pay, you should send an email to the person who is refusing to pay.
If they don’t answer the email, make sure you call them directly. You shouldn’t call them to the point of harassment, but just enough to serve as a reminder than your services weren’t paid for.
Remember that you have more things to focus on than emailing someone who hasn’t paid his or her bill. If it’s been several weeks, you should then call a collection agency or a lawyer to settle the situation.
Remember, a lawyer will charge you a significant amount of money every hour, while a collection agency can handle recovering your money for you. These aren’t free options, but they certainly show your clients that you mean business.
If you have clients who are continuously refusing to pay their bills, you might be wondering how to resolve this issue and how to prevent it from happening in the future. If you’re experiencing an unpaid invoice that is impacting your income and profits, contact the team at Capstone Collections today. We’ll be with you every step of the way and ensure that you get the money you deserve.
4 Ways to Get Your Customers to Pay on Time
Are you a business owner? Are you struggling to get your customers to pay on time? You aren’t the only one; in fact, debt collection is one of the biggest struggles that organizations and businesses struggle with.
That said, there are ways in which you can protect yourself. In our below article, we’re going to detail our top four ways to get your customers to pay on time.
Create a Follow-Up System
This will depend entirely on how you want your business to be run. There are some follow-up systems that require a lot of time and effort on your end, and there are others that take no time at all.
If you’re especially busy, there’s no wonder why you’ve let some customers slide-by without paying. That said, you don’t have to continue on this way. If you want to avoid the issue, a follow-up system is your way to go.
Depending on your platform, you can actually arrange to set up emails when people don’t pay. These are automatic messages that remind them to pay after their order. You should consider acquiring their email(s) when they sign up for your services.
Get EVERYTHING in Writing
When you don’t have anything in writing, people tend to take you less seriously. That’s why this is on our list for the best things that you can do to get people to pay you on time.
When you have a contract in writing, you’re more likely to be paid because having a signature from someone makes it legally-binding. Not only do they have to take it seriously, but they can be charged for not paying.
Hire a Collection Agency
Truth be told, you probably don’t have the time to spend on chasing after everyone who hasn’t paid you. That’s why you might want to hire a collection agency. Some people will shy away from this because they don’t want to pay the fees of a collection agency.
That said, hiring an agency will not only spread the word that you’re serious about being paid, you’ll also be getting more money than if you would continue to let the unpaid fees slide.
Play it Smart
There’s a fine line between trying to get paid and harassment. For this reason, you should only be calling your clients at a reasonable hour and you should make sure not to leave any threatening messages. If you do so, you might find them pursuing YOU for harassment and other charges.
You should try to call them when they know they’re likely to answer and don’t call them too often. If you see that they’re refusing to call you back or they’re refusing to take your calls, that’s when you need to call in the professionals and either hire a lawyer or a collection agency.
All business owners know the struggle of getting people to pay their bills on time. Whether it’s because they don’t want to pay or because they simply forget, it can be a real struggle for everyone involved. Because of this, you might feel discouraged about ever getting paid.
That said, there are measures you can take to heal your headache. In our above guide, we’ve provided you with our top four ways to get customers to pay on time.
Debt Collection – What to Do When Your Customers Don’t Pay
Owning a business comes with plenty of challenges, many of which aren’t always foreseen. One such challenge, and one of the most stressful situations you’ll go through as a business owner, is when your customers don’t pay their bills. Wherever possible the following steps will either prevent or limit your exposure to customers not paying their bills:
Have A Written Contract or Agreement
One of the most important things that you can do to ensure the terms of service are formally agreed, is to have a contract or written agreement signed by both parties. By having such a document, you and your customer have agreed on the terms including when payment should occur and if there are any part payments or payments in advance. A written contract also gives you a clearer path to pursue recovery through available processes if you are not paid when agreed.
Many services can be provided over a period of time and may require a considerable up front cost to your business. To assist with the cashflow of the business and to reduce the exposure to non-payment, agreeing to progressive payment for goods and/or services will help. Non-payment of earlier invoices in such circumstances will allow you to stop providing the remaining good or services thereby limiting your exposure until the customer makes payment.
Despite taking such measures, there is always the chance your customer does not pay for whatever reason. When this occurs, there are a few things that you can do to remedy the situation. One of the most critical aspects to recovering money owed to you, is to act quickly. The longer money goes unpaid, the task of recovery can become more difficult.
Contact Your Customer
Contacting your customer and discussing the overdue payment is very important. Don’t be put off talking about money, you are entitled to payment if you have provided the goods or services agreed. Always be polite and seek to understand why payment has not occurred and if there is a way that payment can be made immediately.
If repeated attempts to contact the customer does not result in payment, engaging a reputable debt collection agency within a reasonable period from the time that the money becomes overdue increases the likelihood of of the debt collection agency being able to assist in facilitating speedy payment. Collection agencies will establish contact with your customer in a formal manner and in compliance with industry guidelines to determine the reason for non-payment and to arrange the earliest possible payment of moneys owing.
If the debt collection agency exhausts avenues to payment of monies owed, then using the services of a legal practitioner may be your only option. Don’t be put off by the potential cost as courts can award a portion of the legal costs to be paid by the customer if the action is successful.
Do you have clients that owe you money? Are you wondering how you can get the money back? It can be quite a struggle which is why we created this guide for you. If you want to solve your debt collection problem that you are not having success with, then don’t delay, engage a debt collection agency now to get the help you need.
7 Debt Collection Mistakes Made by Small Businesses
Do you own a small business?
Do you have debt to collect and your current methods aren’t working?
You aren’t the only one. Plenty of business owners know this struggle and go through it daily.
Of course, there are things that you can go through in order to make the process easier on yourself.
Below, you can read about seven debt collection mistakes made by small business owners so that you can avoid them altogether.
No Follow-Up System
If you’re a small business owner, you’re probably a very busy person. You have to manage so much, and you have a lot of decisions on your plate. Because of this, you might have let some customers go a long time without paying in the past.
When you get in the habit of this, though, it can become easy for your customers to take advantage of you. In order to avoid this, you should have a system in place that prioritizes debt collection.
Nothing in Writing
You should always, always, always have a contract in place. This will protect your client, but it will also protect you. A contract will usually have the details of your business deal, and in it you need to describe the consequences of not paying. Have you and your client sign the contract. This will become a legally-binding contract. If your customer is a regular, make sure that you update his or her information every year. This will only make it easier for you to collect the debts you’re owed.
A Collection Agency
Don’t wait too long to hire a debt collection agency. These people will be able to take the burden off of your shoulders. They’re more experienced and you can go on with your daily life until you get your money back.
Hiring the WRONG Agency
Yes, it’s absolutely necessary to hire a collection agency. You shouldn’t go with the cheapest agency out there. That’s because they might not work that hard to get your money if they aren’t getting paid much in return. Find someone who has a track record of efficiency and cost.
Not Updating Information
By having the right information on-hand, you can contact the people who owe you money all that more easily. This way, you might not even need to hire a debt collection agency.
Although it’s important that you’re paid, you have to be careful about it. You can’t go around harassing people. When it’s been a long time that you haven’t been paid and nothing seems to be working, you should call the authorities and get yourself a lawyer.
Play it Smart
When you’re trying to collect debt, make sure you’re playing it smart at the same time. If you call those who owe you at an unreasonable hour, they most likely won’t answer you. Because of this, you should call them at hours when they’re more likely to answer your phone call. Try using someone else’s phone so that they don’t know it’s you.
Does someone owe you money?
Are you wondering how to get your money back without getting yourself in trouble?
There’s a few major mistakes that most small businesses make when they’re trying to collect debt.
Here are just a few of the mistakes that you can make when you’re trying to get your money back: harassing those who owe you, not updating customer information, calling at the wrong hours, hiring the wrong collection agency, and even forgetting to call a collection agency at all.
Dealing with Post Christmas Debt
In the lead up to Christmas and the Christmas shopping rush it’s easy to lose track of how often you pulled out your credit card.
Cue the bad news in January when your credit card statements arrive. But paying off Christmas debt quickly can help reduce interest and other accumulated charges. Or even worse – debt collection demands.
Here are some steps that you can follow to help deal with post Christmas debt.
Know Your Debt
Before the bills arrive, take some time to add up how much you spent and where. You can use your receipts to tally up your purchases or even take a look at your statements online. Don’t forget to include all purchases that you made on payment plans (including Afterpay and ZipPay), deferred lines of credit and store credits.
Budget, Budget, Budget
The most important step in paying off your Christmas credit card debt is setting up a budget to see how much spare money you have available each month to aggressively pay off your accumulated debt.
Pay Off High Interest Debts First
Prioritise your loans or credit cars and ease the pain of interest fees by paying off the ones that are incurring the most interest first. It can save you a lot of money in the long run.
Consider a Debt Consolidation Personal Loan
If you have large credit card debts hanging over your head, a personal loan might be the cheapest option for you. A personal loan often offers a lower rate than the average credit card and gives you a set repayment calendar and time frame. A personal loan doesn’t allow you to build up more debt whilst already paying back what you owe.
If you are feeling the pressure to make repayments, speak to your credit provider(s). Don’t just ignore it and skip payments – if you do this your credit score will suffer. You may be surprised to know that many credit providers can put you on a different payment plan schedule, making it more feasible to meet your repayments.
Consider Expert Help
If your post-festive debt is massive and you don’t know where to start? Then consider talking with an expert for their suggestions. You can try any financial advisory service or credit counselling agency for hep. Once you initiate contact you will receive guidance on budgeting skills or other financial education you might want.
Use Annual Bonuses & Tax Returns for Debt Repayment
Some people receive an annual bonus from their employer in December or January. Whilst it’s tempting to look at that money as a windfall to buy lots of fun items, take a step back for a moment and look at the bigger picture. These kinds of windfalls actually give you a unique opportunity to take care of those pesky debts and get your financials in order for the start of 2018.
It’s never too early to start planning for next year. You may want to consider opening a specific saving account and putting away $10 or $20 per week so that by this time next year, you will a have significant amount of money on hand, ready to use.
Whatever plans you makes, take control now and don’t let you christmas debt hangover become a real problem.
Why You Should Outsource Your Debt Collection in 2018
2018 is your year! It’s time that you practice working smarter not harder. Ask yourself, what are you doing in your business that ultimately takes you away from your core focus. Chance are, one of those things is chasing up overdue, unpaid invoices.
These kinds of conversations and the paperwork and time behind them can often be stressful. Worse still, they might not be as effective as they once were and can jeopardise your valuable client relationships.
A professional debt collection agency helps to ensure that you have a professional by your side to protect your business as best as possible against mounting debt. Despite the associated stereotypes of debt collection companies, good debt collectors operate ethically and follow strict industry guidelines when helping to recover outstanding debts.
This is why you should consider outsourcing your debt collection in 2018.
Update Your Credit Terms
At Capstone Collections we can help you set terms of trade that are clear and beneficial to your business. This should be signed by all parties prior to any work commencing and should clearly stipulate that all fees and charges associated with the debt collection process are solely the responsibility of the customer.
Conduct Credit Checks Prior to Extending Credit
The Australian Comprehensive Credit Reporting laws make it simple for businesses to have a better idea of a customer’s credit profile. By conducting a credit check on any new customers will significantly reduce your risk of invoices falling into the overdue category. A debt collection company is able to assist you with these types of customer checks and suggest ways to implement these systems.
Ensure The Cash Keeps Flowing
A timely collection of invoices improves your business’ ability to maintain a positive cash flow. Outsourcing your debt collection requirements means that you will have more time to focus on the other important elements of your business, knowing it is being professionally taken care of.
Reduce Your Arrears
Research indicates that the longer an invoice remains outstanding, the less change it has of being settled. That’s why it’s important to ensure that all invoices are paid in both a time and effective manner. Collection companies form an integral part of this system with their access to specialised technology and proven recovery methods.
Engaging the services of a debt collection agency helps take away the burden of chasing outstanding invoices. Working with a debt collection agency will see your late payments and non-payments significantly reduced as their sole focus is monitoring and collecting your receivables.
Maintaining Your Client Relationships
A debt collection agency understands that client relationships are what keep your business running. When you outsource your debt collection to a third party it ensures that conversations with your clients are limited only to the goods and services you provide, rather than worrying about their payments.
Debt Collection agencies work with highly skilled and trained professionals who are capable of nurturing and maintaining the relationships between you and your clients.
If you would like to speak to us regarding professional debt collection and to discuss your outstanding debt needs, phone 03 5400 1281 today.