When Should You Follow Up on Unpaid Invoices?
When Should You Follow Up on Unpaid Invoices?
Following up on unpaid invoices is an important part of managing cash flow and maintaining a healthy business. Knowing when to follow up on unpaid invoices can help you to maintain good relationships with your customers and avoid unnecessary delays in receiving payments. If you have some historic debts that haven’t been collected but you’re unsure on what to do next you should consider the below points.
What to do if you unsure on pursuing late payments.
If you're struggling on what to do about late payments or unpaid debts from a customer. It can be difficult to know where to turn for guidance. One option that you may want to consider is speaking to a debt collection expert for some free advice. Some agencies offer clients a free debt appraisal, this service can help you to better understand your options for recovery and identify potential solutions.
There are not many debt collection agencies that offer free debt appraisals. During a debt appraisal, a trained professional will review your case(s) to determine the best course of action. Not only does this give both parties a clear understanding of the options available but also allows the debt collection agency to decide if this is something they can Recoup.
One of the benefits of a free debt appraisal is that it can provide you with a clear understanding of your situation and the options available. It can also help you to identify any internal procedures that need tightening up.
Like making sure you:
1. Send Reminders: Send a friendly reminder a few days after the invoice due date has passed. This can be in the form of an email or phone call. Often, customers simply forget to pay their invoices on time, and a reminder can be all it takes to prompt them to make the payment.
2. Follow up Regularly: If an invoice remains unpaid after sending a reminder, it's important to follow up regularly to ensure that the payment is made. This can be done weekly or bi-weekly, depending on your business' payment terms.
3. Use a Professional Tone: It's important to maintain a professional tone when following up on unpaid invoices. Avoid using aggressive or confrontational language, as this can damage your relationship with the customer.
Time restrictions on collecting unpaid invoices?
Yes, there are legal timelines for collecting debts, which vary depending on the country and jurisdiction. In general, debt collection laws are designed to protect both the debtor and the creditor, and to ensure that debts are collected in a fair and ethical manner.
In terms of legal timelines, there are typically statutes of limitations on debt collection, which vary depending on the type of debt and country the debt was incurred. For example, in Scotland There is a time limit of 5 years or 20 years (depending upon the type of debt) on taking legal action to claim money owed. It's important for businesses to be aware of the legal timelines for debt collection in their jurisdiction, and to ensure that they are in compliance with all relevant laws and regulations.
Is it worth the time taken to collect?
That depends on a variety of factors, such as the amount of the unpaid invoice, the resources and time available for the collection process, and the overall impact on your business. In general, it's important to consider the potential costs and benefits of pursuing the collection of an unpaid invoice.
On one hand, collecting on unpaid invoices can help improve your cash flow and ensure that you are paid for the goods or services you've provided. It can also help demonstrate to clients that you are serious about payment and may deter future occurrences of late or missed payments.
On the other hand, pursuing collections can be time-consuming and may require resources such as hiring a collection agency or pursuing legal action. Additionally, if the amount of the unpaid invoice is relatively small, it may not be worth the time and cost involved in the collection process.
Ultimately, the decision to pursue the collection of an unpaid invoice should be based on a careful consideration of the costs and benefits, as well as the specific circumstances involved. It may be helpful to consult with a debt collection agency that offers a free debt appraisal for guidance on the best course of action.
You could see a greater loss by not hiring a collection agency.
That's a valid point! While hiring a collection agency can come with additional costs, it's important to consider the potential losses that may result from not taking action to collect on unpaid invoices. If you have exhausted your own efforts and the client is still not paying, a collection agency can provide additional resources and expertise to help recover the debt. Collection agencies have experience in negotiating payment plans and using legal measures, if necessary, which can increase the likelihood of collecting the debt. Additionally, using a collection agency can help free up your time and resources, allowing you to focus on other aspects of your business. Ultimately, the decision to hire a collection agency should take into account the potential losses from not collecting the debt, as well as the costs and potential benefits of using a collection agency.
