Delayed payments can be one of the most frustrating parts of running a small business. You depend on consistent cash flow to keep the lights on and pay overheads. Spending time chasing late payments due to unpaid client invoices can easily lead to high-stress levels and possibly even a loss in profits.
One of the best ways to avoid payment delays is by ensuring your invoice is formatted correctly. The information you need to include on an invoice will depend on your type of business. Take a look at Sage’s handy invoice cheat sheets for more information.
To prevent against late payments and ensure you’re covered if legal issues arise, we recommend establishing clear Terms & Conditions and obtaining written agreement from clients before commencing any work. As part of this, clients should also agree to payment methods (BACS, international money transfer etc) and provide the contact information of the person responsible for processing the invoice.
If you’re working with a new client, it may be best to ask for payment in advance. For larger projects, we recommend spacing payments and work over several invoice periods so that if payments are delayed, you can mitigate risk.