An outstanding invoice is an invoice that your client hasn’t paid by the due date. There are many things you can do to handle an outstanding invoice.
An outstanding, or overdue, invoice is an invoice that hasn’t been paid by the due date. You should take steps to deal with outstanding invoices as soon as possible.
What to do about an outstanding invoice
Once an invoice is overdue, there are some steps you should take.
Firstly, reach out to your client to see what the issue is. Did they forget to pay the invoice? Do they disagree about the invoice amount? Are they dissatisfied with the product or service? Are they not able to pay at the moment? The answer to these questions will determine the next steps you take.
The client forgot to pay
This is the easiest issue to resolve. If your client has simply forgotten to pay, a payment reminder from you, either via email, WhatsApp or via a call could be enough to prompt them into action.
The client has issues with the invoice
If the client has issues with the invoice itself, you have to figure out what’s causing the issue. If the invoice details are wrong, you have to credit the invoice and create a new invoice with the correct details.
If the client has issues with the amount they have to pay, you should refer back to the contract or the agreement to work out any disputes.
The client has issues with the product or service
If the client has issues with what they received from you, you should try to work out why. Again, it’s helpful to refer back to the contract or agreement, to see what you agreed on.
If there is an actual issue with the product or service, you can consider offering a discount, a refund, or new goods or a redo of the service.
If the client has no grounds for their complaints, you can try to get them to pay by sending payment reminders, adding late fees or interest to the invoice amount, or—in the worst case—taking debt collection measures.
The client isn’t able to pay
If the client isn’t able to pay, you can consider offering a discount—so you at least receive some of the money you are owed—an extended due date, or a payment plan so that they can pay you in smaller installments.
How to avoid an outstanding invoice
The best way to avoid outstanding invoices, is to send invoices as soon as you’ve delivered your products or services. You also have to make sure that the invoices are correct and include all the required information. The best way to do this is to use invoicing software for your invoicing.
You should also follow up quickly if the client doesn’t pay on time. With the free invoicing software from Conta, you’ll be notified as soon as your invoices are overdue so that you can reach out to the client and get paid fast.