Profitable businesses still run out of cash. The usual culprit isn’t a lack of sales, but invoices that go out late, contain mistakes, or sit unpaid with nobody chasing them.
The good news is that most late payments are preventable. Here are six habits that make a real difference.
1. Invoice Immediately
Send the invoice the day the work is done or the goods are delivered. Every day you wait pushes your payment date back by a day, because the clock only starts when the customer receives it.
2. Make Every Invoice Complete
Missing details are a classic reason for delayed payment. Check that each invoice includes:
A unique invoice number
Your business name, address and VAT number (if registered)
The customer’s correct name and address
A clear description of what was supplied
The date of supply and the invoice date
The amount due, including any VAT
Your payment terms and bank details
3. Set Clear Payment Terms
Don’t leave “when you can” open to interpretation. State the due date, not just “30 days,” and agree terms before work starts. Shorter terms, such as 14 days, are worth considering for new customers and smaller jobs.
4. Make Paying Easy
The fewer steps between your invoice and your money, the better. Include bank details on every invoice, and offer a payment link or direct debit where you can. Convenience speeds up payment more than most people expect.
5. Follow Up on a Schedule
Chasing feels awkward, so it often doesn’t happen. A simple schedule removes the guesswork:
A few days before the due date: a friendly reminder
Day after the due date: a polite nudge with the invoice attached
7 days overdue: a firmer email, followed by a phone call
Beyond that: escalate according to your terms
Most accounting software can send these reminders automatically.
6. Know Your Rights on Late Payment
In the UK, businesses can generally charge statutory interest and fixed compensation on overdue invoices to other businesses. Putting your late payment terms in writing from the start makes enforcement much easier. Check GOV.UK for the current rates and rules before you rely on them.
A Habit Worth Adding to Your Weekly Routine
Once a week, review your list of unpaid invoices. Sort it by age, chase anything overdue, and note the customers who pay late repeatedly. That list will tell you who to offer shorter terms, ask for deposits from, or think twice about.
First published on LinkedIn.
Numbers R Us is a member of Laurel Leaf Networking.
