Tips for getting paid promptly
Business Start-Ups magazine, February 1998
Invoicing can pose problems and adversely affect cash flow for entrepreneurs when it's not handled properly. Try these tips to make sure you get what's coming to you.
The optimum time to bill customers is as soon as it's practical and convenient for you to do so. If you're in a service business, bill your client the day the service is completed--even sooner if you incur substantial expenses along the way. If you ship products to customers, include the invoice with the shipment.
The design of your invoice plays a role in how quickly it's paid. The form should have a professional appearance with the word "invoice" clearly printed near the top. Your name, or the name of your company, your mailing address and your telephone number should be prominent on the form.
Address the invoice to the person responsible for remitting payment. Name or describe the product or service on the invoice; specify the exact charges for each item; clearly state the total of the bill; and identify the person who placed the order.
To speed payment, state: "payment due on receipt. " To further expedite payment, consider offering a discount if paid within 10 days or, conversely, state that you will charge interest or a penalty if the bill is not paid within 15 days.
On large orders or long-term projects, arrange for payment up front or for partial payments as deliveries are made or work progresses. Put payout details in writing and have the agreement signed before you begin.
Paul DeCeglie is a former staff reporter for Journal of Commerce and American Banker. He can be reached at MrWritePDC@aol.com