When you have an unpaid invoice, it can be difficult to know how to handle it especially if you are a small or micro business. Profitable business relationships are built on personal relationships so it can feel tricky to pursue what is owed without damaging the relationship.

But business is business and you are doing nothing wrong in expecting prompt payment from your customers and by chasing your money if they fail to pay as agreed. So what is the process for chasing up an unpaid invoice?

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Taking the decision to stop supplying a client can be one of the hardest decisions any company has to take. With every piece of business so hard won it can be difficult to take a firm line with your credit control and potentially prejudice further income.

But when a customer persistently refuses to pay in full and on time, sometimes you are left with little option but to act.

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Credit Notes are essentially a negative invoice used to rectify mistakes or credit amounts raised in your sales invoice. They may be used to credit all or part of an invoice depending on the circumstances and serve as an accounting record for both parties to counter the invoicing error.

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Excuses, excuses… one of the most frustrating aspects of chasing unpaid invoices is dealing with the reasons customers give for paying late. When you have worked in the debt collection industry for as long as we have you can be sure we have heard some imaginative answers, along with some that are so old they were probably being used in Roman times.

The key thing to remember when faced with late payment excuses is this - your company is owed the money and you have every right to seek payment. Even when the explanations provided by the client appear to be genuine, if an agreed payment deadline has expired, you are entitled to be paid on time and in full and you have every right to pursue the payment.

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Not being paid on time is one of the biggest worries facing small business owners. Trying to recover outstanding debts can feel like a very lonely process if you are not aware of the help available.

One important thing to remember is this - as a creditor, the law is on your side. Since 1998, UK businesses have been legally entitled to charge interest on overdue payments owed by another company.

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In today’s economic climate, business customers and clients are increasingly asking for - and in many cases expecting - credit from their suppliers.

There are obviously many benefits to offering credit. It shows a willingness to be flexible which fosters stronger business relationships, and it helps to secure or keep important contracts. Used properly, extending credit for goods and services can give your business a competitive advantage and boost income.

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In the B2B world, practically every enterprise will extend credit to a client or customer at some point or another.

For vendors and resellers, credit facilities are a familiar part of payment terms. But even service providers will regularly be in the habit of extending credit to clients - remember, time is money, and any work you do before the first payment date can be considered as credit.

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Consider the following scenario. You are a small, up and coming web design company contracted to create a brand new site for a consumer-facing business. They want the works, attention grabbing graphic design, cutting edge multimedia content, intuitive and interactive navigation, and quality text content. Your small team spends weeks painstakingly programming the source code and curating the content to the client’s specifications. Finally, the site is ready to go live. You are rightly very proud of what you have created.

At this point, the client suddenly goes quiet. Won’t answer the phone, won’t return emails. The payment period on your invoice lapses. You offer to negotiate, still nothing. What do you do?

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For thousands of small to medium sized businesses, cash flow is probably the single most important aspect of financial management. And yet when it comes to planning and forecasting, it often receives scant attention. Indeed, many businesses unfortunately only realise how crucial cash flow is when problems occur.

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Most businesses have experienced the worry and inconvenience of a client that always pays late. Short of ditching the client (and we are perfectly comfortable with advocating that as a tactic), there’s no rapid solution to the problem. But you can improve your chances of getting paid if you subtly change your credit control processes.

In this article we will explore a few easy ways to help you manage those 'tricky' clients and the excuses they use to delay payment beyong agreed credit terms.

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For small businesses, the internet has proved to be a great levelling ground, making winning custom less about size and brand power, and more about simply topping the search results.

But as more people prefer to pay remotely for goods and services, are small businesses at risk of losing custom - or worse, going unpaid for work done - due to their lack of good electronic payments technology?

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Most people have heard of credit checks - even if what you immediately think of is the background check the bank runs when you apply for a credit card, loan or mortgage.

In principle, securing a credit report from Experian on a new customer is the same process, even if you are not lending them money; any goods or services provided upfront, to be paid for later, still represent a line of credit, and a risk to you if the customer fails to pay.

But how do you know who will pay in full and on time, and who is a higher credit risk?

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Unless you have the luxury of an in-house credit controller - which is something even some larger firms can't afford - you might be tempted to take a head-in-the-sand approach to chasing overdue invoices, and simply try to pretend they never happen.

Sadly they do happen, even from trusted long-term customers, and that can lead in turn to some soul-searching: Why didn't they pay? Did I do something wrong? Is there no trust in business any more?

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Whether you're in business on your own, or part of a company, it's essential to protect your income - and one of the greatest areas of risk is when you extend a line of credit to a customer.

Remember, any time you carry out work, or provide goods or services, without taking payment upfront, you effectively become a creditor.

That means you need to think carefully about several different factors, for instance:

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Making sure you get paid promptly every time, without fail, is about more than just issuing invoices promptly (although that can help).

There are several ways to increase your chance of receiving payment in full and on time - and here are some of the main points to consider.

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An unpaid invoice is a nightmare we would all prefer to avoid, but you're not necessarily just at the whim of your customers when it comes to whether or not you get paid on time.

It's also important to make sure you are invoicing properly - from the moment you take on a new customer, to how you deal with late payments - so you don't lose a single penny through your own fault and poor admin procedures.

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When working with clients who are based overseas, there are several things you should take into account - ideally, from the moment you begin working for them, rather than later in the process when you encounter a previously unconsidered obstacle.

Here are some of the main issues at hand, and how you can work around them, or even with them, to make the best possible client relationship.

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Whether you're in business on your own, or part of a company, it's essential to protect your income - and one of the greatest areas of risk is when you extend a line of credit to a customer.

Remember, any time you carry out work, or provide goods or services, without taking payment upfront, you are effectively investing in your customers company.

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Many small businesses are caught out when clients refuse to pay their invoices. For a small startup, a handful of unpaid invoices can make the difference between a healthy bank balance and a full-on cash flow crisis.

When your non-paying client is located outside of the UK, unpaid invoices become even more of a headache. Chasing the debt yourself might be expensive, impractical and fruitless. If you’ve researched debt collection online, you’ll probably have noticed that there’s plenty of self-help when your client is in the UK - but if they’re overseas, there’s very little official advice on what you should do.

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