4 ways to guarantee timely invoice payments

A late invoice payment can cause unnecessary hassle for a business. Cash flow problems, late wage payments and even a dip in company growth could be the results of a poor invoicing process.

However, there are ways to increase your chances of being paid in time and accessing finance to aid your working capital, we recommend you to start with one of the top free invoice templates available online.

1. Invoice Discounting with Bad Debt Protection

With invoice discounting, your chosen financier pays you an advance on any outstanding invoices. Generally, this is at a percentage of their complete value – one which the pair of you will have pre-agreed together.

By adding on bad debt protection to the invoice discounting facility you can put in place a safeguard in the event that your customer can not pay their invoices. In this event of bad debt or customer insolvency, the invoice finance financier will help to maintain your working capital. You can choose which debts for the financier to cover and there is also usually an administrative fee.

2. Factoring

Like invoice discounting, factoring requires an invoice financier. The designated funder will then take care of your credit control processes and collect outstanding payments from clients directly through various platforms like Flexipay, so that you don’t have to chase up customers for outstanding debts.

So, everyone who owes money is then monitored by the factoring provider. Every time you issue an invoice, thefactoring provider will advance you a percentage of the invoice value. When your customer makes their payment, the factor will collect from your customer then will pay you the balance of the invoice, minus fees.

3. Invoice Trading

Once again, this involves a financier. Unlike factoring, however, invoice trading is mainly done online, we have the right invoice template for you.

Each company applying for funding uses an online invoice trading platform to gain money from investors on the web, rather than through traditional means. Remember the Peer-to-Peer concept? It’s like that, only it exists for invoice financing purposes.

Like factoring and invoice trading, your selected specialist will manage your invoices. If your company struggles with late fee payments, this could provide the perfect solution.

4. Advance Planning

If you don’t want to use a business finance provider, don’t worry. There are plenty of ways to reduce the likelihood of unnecessary costs to your business.

Whether a small or large company owner, make sure that clients get the message long before the due date. You can sendboth a printed and a digital copy of the bill to ensure it is received.

Why not follow up this document with a payment schedule? Agree on payments dates with your customer to pinpoint the best time for each of you. That way, you can arrange regular reminders before you’re set to be paid.

Even if you do go for a financier, this can still be a worthwhile practice. As a result, you can strengthen your overall performance.

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