Why collecting your debts in time is important
An expert urges business owners to take swift action if their invoices are not paid.
You should act on an unpaid invoice as early as possible. The Asiakastieto company has warned businesses about the risks of the prevailing economic situation. We recently reported on a new phenomenon in bankruptcy statistics.
“Big bankruptcies are also reflected in other companies’ operations. That is why every business must diligently monitor its clients to ensure they can react to changes in solvency while corrections are still possible,” Jaakko Nors of Asiakastieto says.
One entrepreneur in the invoicing sector says that you should act fast on an unpaid invoice.
“The longer you leave an unpaid invoice, the less likely it is that the invoice recipient will pay. Timely payment reminders are good customer service,” Sami Saarenpää, the owner of KTI Laskutus Oy, says. His advice is to make a routine out of invoicing.
“When the job is done, you ought to invoice for it that same day.”
React to your business’s issues in time
Tiina Toivonen, Legal Affairs Manager at Suomen Yrittäjät, the Finnish SME association, reminds business owners to take notice immediately if their own business’s financial situation shows signs of crisis.
“A business owner should take notice right away if the company has difficulty paying wages, repaying loans and interest, or if invoices are piling up. You should also be concerned if the company’s profitability, sales and workload decreases significantly or if you as the owner find it hard to cope,” she says.
Toivonen says that financial difficulties should be tackled immediately, as the faster a problem is addressed, the more likely it is that business activities can be sanitized.
“If you cannot pay an invoice or debt by the due date, I’d recommend contacting the creditor, bank or collection agency directly and agreeing on a longer payment term or a repayment schedule,” Toivonen says.
Professional, free financial advice is available from Suomen Yrittäjät or the Yrittäjän talousapu financial counselling service.
“You should also be concerned if the company’s profitability, sales and workload decreases significantly or if you as the owner find it hard to cope.”
Tiina Toivonen, Suomen Yrittäjät
Invoicing tips
Check the invoicing address
It is often polite to ask new clients whether they have received your invoice. That raises the threshold for the client to pay your invoice late.
Sari Saarenpää encourages business owners to avoid sending invoices by email and on paper.
“When an e-invoice is easily payable in the system, it is also paid easily.”
Remember the payment term agreed with the client
If a business invoices a consumer, the payment term must be at least 14 days.
What if the invoice is not paid?
Saarenpää advises the business that sent the invoice to contact its client as quickly as possible.
“It’s worth asking whether you should push back the due date or take payment in instalments.” In addition to a polite phone call, it is sometimes a good idea to ask for an email to confirm the agreed payment arrangement.
If your own actions are unsuccessful, it is worth handing the invoice over to a debt collection agency. This could increase pressure to pay the invoice.
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