What The Accounting Team Can Do To Recover Unpaid Invoices

Like it? Share it!

What if a client owes you a large sum of money but fails to pay you? As it happens, your finance team can play a significant role in recovering the payment. Indeed, there may be a variety of reasons why someone doesn’t pay their bills. Working with a professional accountant, or outsourcing your business finances to an expert, means that you are in a better position to handle the issue. 

#1. The invoice was incorrect / not sent

Nobody is perfect. Perhaps, you forgot to send the invoice, or perhaps there was a typo that affected payment. When you work alone, you are more prone to mistakes. 

An accountant can help check that every document you send or receive is in order, preventing any misunderstanding. Invoicing errors are one of the most frequently overlooked causes of late payments. So, you need to make sure you can get things right from the start. 

#2. The payment terms are unfair

Most clients try to pay invoices on time. However, unrealistic payment terms can affect their ability to make payments on time. Your accountant can help handle the issue by reaching out and trying to understand the problem. 

First of all, it can be helpful to understand the different payment terms available and how they can affect your business. Short payment terms may seem to support cash flow. However, if you send a big invoice to your client with a short-term term, they may not be able to pay you. It will affect your cash flow and create financial instability. 

Working with a professional accountant can help set the right payment terms for your business. You can also find the best response to late payments, such as adding fees, for example.  

#3. The client is unable to pay

Sometimes, things go wrong. Your client may have encountered an unexpected event that affects their ability to meet your payment terms. With the help of your accountant, you can negotiate new and exceptional terms to help them pay their bills, such as creating a structured settlement with them. 

Unfortunately, this method can be risky for small businesses as you may need to wait a long time to recover the full payment. If your business needs to get money to survive, this solution may not be effective in the long term. However, you can also unlock a lump of money by reaching out to annuity buyers to find a direct funder. 

#4. The client is paying, but it’s too slow

As a business owner, you may have different periods of activities during the year. So, if you unexpectedly encounter a low period with only a few clients, it can be tough to maintain your business afloat. Even paying clients can be slow, especially if your payment terms allow it. So, if you need money right now and you know you can’t expect clients to make any payment soon, invoice factoring can be a great way to settle your accounts without losing your clients. It is a process that essentially places the amount due to your account so that you can carry on business as usual. 

Every client is different. Working closely with a specialist accountant, as part of your team or as an outsourced resource, can help handle invoices, late payments, or payment-related cash flow issues. 

Like it? Share it!

, , , ,

No comments yet.

Leave a Reply

Powered by WordPress. Designed by Woo Themes