Dealing with late invoice payments is never fun. Thankfully, there are several proactive measures you can take today to navigate these difficult situations and come out on top.
Today is also an opportunity to create new policies that will help prevent late payments in the future. In this discussion, we share a few proactive steps you can take to avoid the hassle of late invoice payments and expedite the payment process, too.
Paper invoices are prone to getting lost in the shuffle. Moreover, sending invoices through snail mail prolongs the entire payment process. Customers are more likely to pay if you send invoices early, when purchases are still fresh in their minds. Wait too long and invoices may become lost in the noise.
Set up invoices so customers can pay online via credit card or bank transfer. Allowing multiple payment methods keeps customers happy – and it makes it even easier for them to pay on time.
When customers put down a deposit, they’ve got even more skin in the game. Plus, you give customers more payment flexibility, a move that will ultimately strengthen your business relationship. Check out our guide for how to set up deposits in QuickBooks Online.
Make your payment terms clear
Ensure your payment terms are easy to find and appear on every invoice. We don't recommend applying new payment terms retroactively. If you commit to "Net 60” payment terms, customers have 60 days to pay you. Even if they pay at 11:59pm on day 59, it’s still considered “on time.”
Work with your customers so there’s never a reason to miss a payment. There may be a good justification for why they are chronically late. In some cases, however, customers might need a little extra incentive.
If you didn’t establish a late payment policy from the beginning, it’s best not to impose surprise late fees. The red tape would only prolong the payment process. Plus, it’s just bad business.
Now it’s your turn
There is no “one size fits all” when it comes to invoice payment terms. If you’re up for an experiment, send invoices with Net 15, Net 30 and Net 60 deadlines to different sets of clients.
Which payment terms help you get paid most consistently? Share your results on the QuickBooks Community!
"the “Deposit” data field near the bottom of the form."
The DEPOSIT data field (near the bottom of the sales form) is Intuit hard-wired field for payment crediting to Accounts Receivable (A/R) account. It works like Receiving Payment on that Invoice. There is no way to change the account number if you want to use this to offset against account like the Retainer or Upfront Deposit set up as a Liability on your books.
I have written this somewhere else in the forums but adding this here for everyones benefit again
I think the below are the two components to getting paid on time
1.Automating the task of sending email reminders.Well timed email reminders are known to improve DSO's
2. The content that goes into those mails needs to be thought through
I would suggest writing on a board the timeline before and after the invoice due date in days
After this come up with mail content for each of these dates.Make sure these automated emails have one of you/your team members in cc so that they can reply back to you to have any questions cleared.
Btw i am from a small software company called PayorCRM.com automating the above function
Thank you for the workflow advice, this would be a great premise to an article. I'd love to hear more about PayorCRM, it's advantages and how it can help members with this process - whatever helps QuickBooks users get paid faster, we are all for it!
Thanks James .
I would love to collaborate.I could send out a draft version if I can have your email id through a private message.I am pretty sure using Quickbooks along with a receivables management software(such as PayorCRM) can be a great way to improve cash flows of B2B businesses
Awesome! Great to hear. I have a recommendation, let's start a new post (we can start here) and call it "Payment Workflow Improvements." We can dialogue with the community around this basic question:
What can you do to have the biggest impact to improve your payment processing?
Megan, feel free to change the question around however you'd like, I will leave it up to you to start the conversation :).
Added the article here.
Wanted to make sure that sufficient context was provided to readers
Do cheer :)