Edwin Cooke

Get invoices paid on time!

News   •   Oct 28, 2010 13:46 BST

People delay paying invoices for a variety of reasons, but one way or another it’s mainly due to cash flow. Some businesses will be operating on a tight margin and therefore stretch payment terms by paying a day or two late, thus ensuring they receive payment on their invoices in time to pay yours. Other businesses realise they are in a much stronger position of they have a lot of cash available and therefore get their invoices paid as soon as possible and delay paying invoices offering any excuse to drag out the payment. You will hear excuses such as “you need to speak to XYZ in accounts” or “The boss is out on business he signs the cheques and won’t be back until Friday” or “The cheque’s in the post” or “We seem to have mislaid the invoice can you send it through again.” Or “Make sure you send the invoice to me, that way I can ensure it gets paid as quickly as possible”. One tried and trusted method I find is as follows:


1)      Send the invoice off promptly and include a sweetener for early payment.

2)      Phone a day or two before payment is due to confirm when payment will be made. If you are fobbed off to accounts or the boss ask to speak to them to get verbal confirmation the bill will be paid on time, be persistent and get the right person to speak to. It might take a bit of time but you will get through and confirm when the bill will be paid.

3)      Follow up with a confirmation email of the agreement when the bill will be paid.

4)      Nine times out of ten your bill will be paid when the client agreed to pay it.

5)      If you gave them extra time to pay in step 2) phone them again the day before and repeat the process. This time follow up with a late payment notice.

6)      If they don’t pay it when agreed, phone them the day after and ask where the money is and when they will pay it. Follow up with a late payment notice.

7)      Make you Late Payment Notice very formal to ensure you can if need be use it in court.

8)      If they still don’t pay, send a letter title “Notice of Intention to Prosecute”. This may sound heavy handed but you are giving them every opportunity to comply and not letting the situation lapse through a combination of apathy and hope that they might pay.


In my experience the persistence at step 2) is incredibly successful, think about it how can people say no? They are not prepared for you to confirm payment will be due on the last day of the payment terms and you will often catch them off guard and once they have given you their word the day before, how many people could then not pay? Furthermore you find out earlier if there is a difficulty with payment.


The remainder of the steps gradually rank up the pressure, but you are not being nasty rather you are playing on their guilt. If you chase an invoice a week after it is due the client will be very relaxed and may fob you off, however if they have made commitments to pay a day or two later this is much more difficult for people to ignore. Whether it is pride, people desire to be seen as truthful and honest, it doesn’t matter. They are more encouraged to pay.


Now in step 1) I suggested you send a sweetener, I am very much against discounts for early payment as this gives the client wriggle room, and an option to haggle with you on the next job. What I would suggest is a discount off a future purchase, however if you give the game away too soon it will have little effect. This is where scratch cards could come in handy. You could have a variety of prizes say four standard prizes plus some star prizes. Some can be minor, others quite irresistible. Mention all the prizes in a letter with your invoice and state if you receive payment by return (or by a set date), you will send them a scratch card with a chance to win. This will encourage the greedy who are withholding payment for the sake of it to pay more promptly. However you could set up your offers to encourage future sales, as complementary products and services may be useful with each prize. You could use the prizes as a way of introducing a new product and getting it known. The options are truly endless.


Creation Publicity (http://wwwcreationpublicity.com)  are one such company printing scratch cards and currently have a 25% discount on all orders.