The UK is home to many startups and small businesses that make up almost their entire local economy’s population. Recent months have been challenging for London’s local small and medium enterprise (SME) sphere, which has to do with cash flows and other financial matters. It’s even suspected that this might become even more important to consider in the post-pandemic era. Following a year of harsh financial hammering, some companies might be struggling with overdue invoices and other balances that require prompt attention. Cash flow is already an issue for many SMEs and startups, but accountants in London are always ready to assist. Affordable accounting is the name of the game, and this is the best way to start managing finances to avoid crunching this year.
The Damage of Overdue Invoices
Invoices are typically left unpaid because of overlooking essential details of financial statements and planning. If accounting isn’t done correctly, this can cause issues in cash flow and even tax payments, which will damage the way you run a business. This lack of proper flows can lead to the inability to pay employees, suppliers, and other entities linked with your business. You might end up with late fees stacking up and a damaged reputation, which will affect many things regarding financial stability.
As a business proprietor, you’ll always want to be on top of invoices, as those who do not pay you on time will cause damage to your company’s whole chain and network. There are ways to avoid unpaid invoices, and there are methods that can chase overdue payments without damaging relationships. Here’s how you can deal with unpaid invoices according to accountants in London:
1. Avoid Clients That Have Poor Credit Histories
Doing research on people’s credit histories and even digging around the Companies House website can give you plenty of information on clients before committing to them. Credit checks are always a good reassurance that those who do business with you will end up paying, and people are aware of how the system works, meaning no hard feelings. This way, your company avoids investing money in something that might not be returned in the future.
2. Be Clear About Payment Terms ASAP
As soon as a client reaches out, ensure that the terms for payment are clearly indicated to avoid any mishaps or misunderstandings. It might seem a bit abrupt to bring up payment terms, but many clients appreciate the clarity of money matters off the bat. Know how long the payment term will last and the consequences of late payments, but do so respectfully. In business, it pays to be straightforward and clear about everything, and most customers will understand how this goes. If they are absolutely dead-set on forming a relationship with you, even asking for payment upfront won’t be an issue.
3. Make the Payment Portal Easy for Everyone
You don’t want to keep badgering people to pay invoices through ancient methods, so setting up a way to do so with their preferred mode of payment can help make the process easier. Online banking apps and other payment page software can help people make seamless transactions, which further expedites the process.
4. Look Into Incentives for Early Payments
When people are given incentives for paying early, they are more likely to push through with being on time. By setting up things like discounts for other products and services, or a gift, clients will be more inclined to pay invoices on time or earlier.
Invoices can be challenging to pursue and even demand prompt payment because not all clients are built similarly. On-time invoices are how businesses make money, so be sure that finances are worked on to avoid pressing cash flow issues and management issues.
Cheap Accountants in London offers affordable accounting solutions for small and medium enterprises in London, the UK. Taxes, financial statements, and other revenue documents can be challenging to deal with annually, making professional services the top choice. Contact us to learn more about how we can help you with your financial needs and dealing with overdue invoices.