Why you should stop chasing unpaid invoices
Tired of chasing late invoices from the same poor payers? Read why you should stop now, and save time and stress by automating your credit control instead.
When you run your own business (especially if you’re a mum) one of your most precious resources is your time. Let’s face it, how many of us wouldn’t love to squeeze in a few extra hours a day to get more done?
How much time do you waste on late payers?
And yet, according to the Federation of Small Businesses (FSB), every week we waste as many as 10 hours chasing unpaid invoices. No surprise when you take into account these shocking statistics from 2011:
- 73% of small businesses had experienced late payment for their supplied goods and services within the past 12 months.
- Two in five of those experiencing late payment claimed that 31% or more of their invoices were paid late. A fifth claimed over half are paid late.
- Around half of their members had outstanding invoices worth £5,000 or more. A fifth had more than £20,000 owing.
The true cost of chasing unpaid invoices is higher than just lost time. Two thirds of the FSB’s members said they had written off invoices in the past 12 months, and a fifth had written off £5,000 or more. Late payments had also impacted their profitability and ability to pay their own suppliers on time.
Why you need a proper credit control system
So what’s the answer? As we outlined in this article, implementing a professional and properly managed cash flow system can help to prevent problems arising in the first place. Here’s a quick overview of our tips:
- Make sure every client has a copy of your up to date terms and conditions.
- Clearly state your terms on every quote.
- Find out who is responsible for payments and use them as a point of contact.
- Confirm any verbal payment agreements by email.
- Check that clients have honoured payment promises.
- Be politely relentless when chasing unpaid invoices.
- Enforce your terms and conditions and chase payments as soon as they are overdue.
- Add late payment changes and interest (read more about them here).
Automate your credit control and save time
If this all sounds like stressful, time-consuming hard work (which it is!) there is another option. Companies like Satago enable you to easily automate your credit control processes. Here are some of their features:
- Automated credit control – you can set your account up to send automated customised invoice reminders, statements and ‘thank you for paying’ emails.
- Insight into your customers’ financial habits – you can monitor your customers’ credit limits and payment behaviour.
- Early warning of potential poor payers – you can search for any UK company to see their credit profile before dealing with them.
- Managing your cash flow – if you need to, you can prevent poor payers from obstructing your cash flow by advancing payment through Satago.
Start now for free
Automated credit control doesn’t have to be expensive either. If it’s integrated with a cloud accountancy package, Satago’s standard plan is free to use. And their desktop plan is just £50 paid annually. (Both include up to 5,000 invoices a month.)
Satago works with the following cloud accountancy packages:
- Quickbooks Online
So if you’re tired of wasting time chasing the same poor payers, consider automating your processes – and spending more time and energy on the parts of your business you love.
Find out here how Satago can save you time and stress by automating your credit control.