Many business owners encounter cash flow problems at one time or another, primarily due to slow collection on past due invoices. However, the way you invoice can help you avoid late payments. Here are six tips to good billing practices:
- Identify each service or good being provided along with its cost. Be sure to include a place to set the quantity of each service or good sold.
- If payment is not to be made at the point of sale but after services are provided, set a “due date” so customers or clients know when payment is expected.
- If your business charges a late fee or interest for accounts that become delinquent, be sure to state in conspicuous fashion the terms of the late fees or interest. You should also consult with a business attorney to discuss any limitations on what may be charged under state law.
- In order to collect delinquent accounts, it may be necessary to retain legal counsel to seek recovery. Therefore, it is important to give notice of the right to seek recovery of attorney’s fees, if necessary, to collect the account.
- Use clear, conspicuous language so your company’s terms and conditions are clear.
- If your company engages in emergency services such as responding to plumbing problems on holidays or weekends or evenings, spell out any other fees for such services provided during non-work hours.
A well-constructed invoice can help you minimize problems with collecting unpaid bills and enhance customer relations by showing your company is clear and honest about its fees and costs.
To learn more about good legal business practices, call us today to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit.