Unpaid invoices: What actions can you take?
Unpaid invoices: How do you limit risks and take action?
Unpaid invoices are a problem that every entrepreneur faces sooner or later. Whether you're just starting out or you've been in business for years, the impact of an unpaid invoice can be huge, especially when multiple invoices are left behind. Good preparation and swift action in case of payment arrears are crucial to ensure the financial health of your company.
How do you reduce the chance of unpaid invoices?
While you can never completely prevent unpaid bills, there are several steps you can take to reduce the chance of them:
- Know your customer: Always check the creditworthiness and financial health of a new customer before collaborating. This gives you insight into the customer's payment behavior and reliability.
- Clear agreements: Set clear terms and conditions of delivery and make sure your customers agree to them before you start an order. Also include a retention of title in your terms and conditions. This means that the delivered products only become the property of the customer after the invoice has been paid in full. Does the customer not pay? Then you can reclaim the products.
- Be consistent and professional: Make sure that agreements made are always clearly recorded. This creates customer trust and reduces the chance that an invoice remains unpaid.
What to do in case of unpaid invoices?
Despite all your precautions, it can still happen that an invoice remains unpaid. This may be a mistake, but it is important to take action quickly. The longer you wait, the greater the risk that you will no longer receive the money.
- Send a payment reminder: Once the payment term has expired, do not wait too long and send a payment reminder immediately. Sometimes an invoice is simply overlooked and a friendly phone call or email can resolve the matter quickly. Calling often works better than emailing because you make direct contact with the customer and get clarity more quickly.
- Send a reminder: Is the payment still pending? Then it is time to send a formal reminder. This is more compelling than a reminder and indicates that you will take serious action if the invoice is not paid quickly. If possible, add additional charges for late payment, as long as this is included in your terms.
- Send a notice of default: If the customer does not pay even after the reminder, you can send a notice of default. This gives the customer one last chance to pay before you take legal action or hand over the claim to a collection agency. Make sure you clearly state what the consequences will be if payment is still not made.
The importance of tight debtor management
Effective debtor management is essential to the financial health of any company. Unpaid invoices can disrupt cash flow and, if left untreated, have serious consequences for your business operations. By introducing a structured process for following up outstanding invoices, you minimize the risk of problems.
Automating debtor management
At NIKKI, we understand that keeping invoices can be time-consuming. That's why we offer solutions such as automated reminders and clear reports, so you always know exactly which invoices are still outstanding and what actions you can take. In addition, we have collaborations with collection agencies to be able to take further steps when necessary.
Credit insurance: Extra security in case of unpaid invoices
Good debtor management offers a lot of security, but in some cases an extra layer of protection is desirable. Credit insurance can be a solution. This insures you against the financial consequences of unpaid invoices. Although credit insurance does not guarantee that every invoice will be paid, it does provide the certainty that you will not run into financial problems if something goes wrong.
Benefits of credit insurance
- Compensation for unpaid invoices
- More security for large orders
- Less stress about debtor management
- Protection against long-term payment delays
Frequently asked questions about credit insurance
What happens if a customer doesn't pay?
If a customer does not pay, credit insurance pays for the damage in accordance with the agreed terms. This is how you protect your company against the financial impact of unpaid invoices.
Can I take out credit insurance for specific customers?
Yes, you can take out credit insurance for specific customers or projects. This way, you know exactly which invoices are insured and you are specifically protected.
How much does credit insurance cost?
The cost of credit insurance depends on the size of your business, the number of customers and the risks you run. Contact us for a customized proposal.
Let NIKKI help you with unpaid bills
At NIKKI, we're here to help you with all your billing needs. Our solutions make managing unpaid invoices easier and more efficient. Get in touch today and discover how we can take your debtor management to the next level.
At NIKKI, we love personal contact and quick solutions. Whether you have a question about our services, want to discuss a collaboration or just want to have a chat, we're here for you.
