An outstanding invoice is an invoice that your client hasn’t paid yet. There are many things you can do to speed up the payment process.
An outstanding invoice is an invoice that you’ve sent to your client, but that they haven’t paid yet. It’s considered outstanding regardless of whether the due date has passed or not, it’s an unresolved invoice. Outstanding invoices are also called open invoices.
Once an invoice has been paid, it’s no longer considered outstanding.
How to ensure that clients pay outstanding invoices quickly
Make professional invoices
You should use free invoicing software to make professionally formatted invoices. With invoicing software, you can rest assured that all the necessary details are included, and that the client has all the information they need to go ahead with the payment.
Offer several payment options
While bank transfer is very common, it’s also a good idea to offer other payment options, such as PayPal or Stripe payments, or even checks.
Build good relationships with clients
Having a good client relationship means that clients will be more predisposed to pay you on time. It also means that they’re more comfortable reaching out to you if they have any questions or concerns.
See also: How to build great relationships with customers
Set shorter payment deadlines
You might think that 30 day payment terms are the only acceptable terms, but many business operate with shorter terms, for example 14 days.
Make sure to communicate with the client upfront, and send the invoice via email rather than in the mail so that it reaches them quickly and doesn’t eat into their 14 days.
What to do when the client pays an outstanding invoice
Once the client has paid you, you mark the invoice as paid in your invoicing software. The invoice will no longer show as outstanding, and you won’t be reminded about it once the due date passes.
Keeping track of the status of your invoices is very important, as long payment periods can negatively affect your cash flow. In other words, if it takes a long time to get paid for your work, you might not have enough cash to cover all your costs.
It’s also very important you need to quickly follow up on invoices once they become overdue.
See also: How to handle overdue invoices