{"id":4538,"date":"2018-06-19T18:39:27","date_gmt":"2018-06-19T22:39:27","guid":{"rendered":"https:\/\/www.sage.com\/en-us\/blog\/?p=4538"},"modified":"2025-07-17T13:33:52","modified_gmt":"2025-07-17T17:33:52","slug":"invoice-management-tips","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-us\/blog\/invoice-management-tips\/","title":{"rendered":"Late paying customers? Try these tips from the experts"},"content":{"rendered":"
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\n\t\t\t\t\t\t\tMoney Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t
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\n\t\t\t\t\t\tLate paying customers? Try these tips from the experts\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t

\n\t\t\t\t\t\t\t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t

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\n\t\t\t\n\t\t\t\tTripp Braden\t\t\t\tTripp Braden<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\n\n\n\n

\u201cImagine walking into a shop, taking what you want up to the counter, and then, when the time comes to pay, saying \u2018thanks \u2013 but I think I\u2019ll just take these now and pay later\u2019, and casually walking out with your items. You obviously wouldn\u2019t dream of it \u2013 so why is this kind of behavior acceptable when it comes to paying small business suppliers?\u201d Stephen Kelly, CEO, Sage.<\/p>\n\n\n\n

If late payments<\/a> persist they will hamper your ability to survive as a business, forcing you to take action that may or may not ultimately benefit your long-term strategy for growth and success.<\/p>\n\n\n\n

A survey<\/a> that we recently conducted found that 11% of all invoices issued by SMEs are paid late. On the surface, 11% may not seem a lot, but it makes all the difference to business owners and operators.<\/p>\n\n\n\n

SMEs not only account for a significant (in many cases the majority) share of economic activity and employ a large share of the working population, but they also drive innovative and vibrant sectors in virtually all parts of these economies and in every region and territory. Meaning, the interest in getting SMEs paid on time or as near as, is all of ours.<\/p>\n\n\n\n

We spoke with a number of our Global Experts and asked what can be done to stem the flow of debt and open the ways to stability. Read on for their thoughts, and follow our #SageTop100<\/a> on Twitter for more commentary.<\/p>\n\n\n\n

How can you identify late payments early?<\/h2>\n\n\n\n

\u201cThe biggest mistake businesses make when invoicing<\/a> is not having a standard process in place to ensure the bill goes out on time and is trackable throughout the collection process.  Over eighty percent of billing problems are caused by not having a standard process, in my experience. I always suggest clients invoice as soon as they can. In many smaller organizations, it\u2019s important to help your team understand how important the invoicing process to your organization\u2019s and their long-term success.<\/p>\n\n\n\n

Many times, invoicing reflects an entrepreneur\u2019s insecurity about being paid what they are worth, and this can cause significant problems over time as people see what their leader does.\u201d – Tripp Braden @TrippBraden<\/a><\/p>\n\n\n\n

\u201cI think many small businesses<\/a> just assume they\u2019re going to be paid late. If you\u2019re doing business with larger corporations, this is an all too frequent occurrence. The key then is to prepare for it. Make sure you invoice your customers and clients quickly. In some cases, late payments are due to SMBs saying they\u2019re too busy to send invoices.\u201d – Rieva Lesonsky @Rieva<\/a><\/p>\n\n\n\n

\u201cA good software program<\/a> will trigger an alarm on unpaid invoices. It\u2019s really that simple.\u201d – Shep Hyken @Hyken<\/a><\/p>\n\n\n\n

If there’s a role for intervention, what is it?<\/h2>\n\n\n\n

\u201cThe first notice should be courteous and a reminder. The second should be to ask for a specific response, again, still courteous. The third attempt should be over the phone. Talk to the customer. Find out what the issues are. Offer options, if any. The personal interaction can often lead to a promise to pay, that the customer typically follows through on.\u201d – Shep Hyken @Hyken<\/a><\/p>\n\n\n\n

\u201cAutomating your accounting systems<\/a> might help, particularly if you have an automated collections process.\u00a0Another solution to \u201ctide\u201d you over until payment arrives is to turn to invoice financing<\/a> or factors that provide you with money on your accounts receivable<\/a>. Compare offers before you commit, since, in some cases, the fees can be high.\u201d –\u00a0Rieva Lesonsky @Rieva<\/a><\/p>\n\n\n\n

\u201cThe best process to follow to be paid on time means the business and their customers both understand clearly what is expected of both. Today business leaders must understand how their customers pay and what their customers\u2019 process for payment is.<\/p>\n\n\n\n

The person handling the payment on your team should be clear on the customer\u2019s expectations for billing<\/a>. It\u2019s critical to have the correct contact information for customers as well as knowing how to follow up as needed with the customer. Make sure you recognize when your invoicing person does a good job.<\/p>\n\n\n\n

Help your people by creating a standard process for follow up so that is easy to see where an invoice is in your billing process. When using billing automation make sure your people stay on top of the invoice throughout the process.<\/p>\n\n\n\n

Provide additional training so people are comfortable with the stress involved when dealing with non-payment of invoices. Most people feel uncomfortable having to follow up with non-paying customers. Many times, the problem can get significantly worse because of the lack of follow through and understanding.\u201d – Tripp Braden @TrippBraden<\/a><\/p>\n\n\n\n

What recourse do you have to accounting support?<\/strong><\/h2>\n\n\n\n

\u201cWhen people pay late you must have an invoicing process that shows you when it happens. Many organizations don\u2019t always know when a client is the habitual slow payer<\/a>. Technology can help with this. When they pay late your people should assume it\u2019s an error, not a pattern. It\u2019s about the mindset your people have when dealing with these challenges that decide if you keep the customer or not.<\/p>\n\n\n\n

If it\u2019s habitual you may want to get the right people involved on both your side and the customers to decide the best course of action moving forward.\u201d – Tripp Braden @TrippBraden<\/a><\/p>\n\n\n\n

“Technology provides a lot of solutions. Looks for accounting programs that offer you easy access (cloud-based<\/a>) and include automation tools.” – Rieva Lesonsky @Rieva<\/a><\/p>\n\n\n\n

Is it viable to credit check new customers?<\/h2>\n\n\n\n

\u201cIf you have a history with the company, you know what to expect and how late payments are likely to be. If you don\u2019t, you might try to head off problems upfront, by asking for partial payment before you provide the work. You can run credit checks on companies to see what their payment histories are.\u201d – Rieva Lesonsky @Rieva<\/a><\/p>\n\n\n\n

\u201cDepending on the type of business, a credit check is appropriate, if not a necessary step in setting up a new customer.\u201d – Shep Hyken @Hyken<\/a><\/p>\n\n\n\n

\u201cIf you\u2019re friends with the customer, it becomes more critical to have a system in place from the beginning of the business relationship. It\u2019s the process that is clearly understood in advance that helps resolve these situations more quickly.<\/p>\n\n\n\n

Two rules of guidance on this. First, it\u2019s not personal it\u2019s the process. Second, know your worst-case scenario in advance. When people aren\u2019t paid it may be natural to over-respond and forget you’re dealing with people, not an organization.<\/p>\n\n\n\n

The better you become at understanding what results you want and need, the better off you are at getting the best solution for you and your customer.\u201d – Tripp Braden @TrippBraden<\/a><\/p>\n\n\n\n

If you don\u2019t have the staff, how can you prioritize invoicing?<\/h2>\n\n\n\n

\u201cThis is a matter of cash flow. Do you want it or not. Getting paid<\/a> is a part of business. The system you set up for invoicing and accounting is every bit as important as the sales and marketing department. If you are going to make a sale, it doesn\u2019t make sense not to collect on the sale.\u201d – Shep Hyken @Hyken<\/a><\/p>\n\n\n\n

There are many reasons why SMEs are considered the backbone of the economies. They typically account for the majority of employment, pay a substantial share of corporation taxes and are key drivers of growth, innovation, and diversity. Their contribution is particularly noteworthy given the obstacles they face including lack of financing, difficulties with staff recruitment, late payments and a disproportionate burden of compliance with regulation and tax rules.<\/p>\n\n\n\n

They require and deserve our support.<\/p>\n\n\n\n

<\/p>\n\n\n\n

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Free Invoice Templates<\/h2>\n\n\t\t\t\t\t\t\t\t\t
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Free invoice templates, designed for you in mind.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\tDownload now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t

\n\t\t\t\t\t\n\t\t\t\t\t24,386 readers have downloaded these templates\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\"\"\t\t\t<\/div>\n<\/div>\n\n\n
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Subscribe to our Sage Advice Newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t
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Get our latest business advice delivered directly to your inbox.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\tSubscribe<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\"Working\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

\u201cImagine walking into a shop, taking what you want up to the counter, and then, when the time comes to pay, saying \u2018thanks \u2013 but I think I\u2019ll just take these now and pay later\u2019, and casually walking out with your items. You obviously wouldn\u2019t dream of it \u2013 so why is this kind of […]<\/p>\n","protected":false},"author":625,"featured_media":2733,"menu_order":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"footnotes":""},"categories":[43],"tags":[205,152,155],"business_type":[40],"lilypad":[],"context":[],"industry":[],"persona":[96],"imagine_tag":[215,230,231],"coauthors":[582],"class_list":["post-4538","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","tag-influencers-to-follow","tag-starting-a-business","tag-staying-competitive","business_type-small-business"],"sage_meta":{"region":"en-us","author_name":"Tripp Braden","featured_image":"https:\/\/www.sage.com\/en-us\/blog\/wp-content\/uploads\/sites\/2\/2017\/10\/Relationshipbuildingwithcustomers.jpg","imagine_tags":{"215":"HR and Payroll","230":"Small business","231":"Start up business"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice US","distributor_original_site_url":"https:\/\/www.sage.com\/en-us\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/4538","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/users\/625"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/comments?post=4538"}],"version-history":[{"count":0,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/posts\/4538\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media\/2733"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/media?parent=4538"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/categories?post=4538"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/tags?post=4538"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/business_type?post=4538"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/lilypad?post=4538"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/context?post=4538"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/industry?post=4538"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/persona?post=4538"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/imagine_tag?post=4538"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-us\/blog\/api\/wp\/v2\/coauthors?post=4538"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}