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Late paying customers may seem like an inevitable part of running an agency, however, to maintain a steady cashflow and cover expense, small businesses rely on prompt payment of invoices.

According to accounting software Xero, “almost half of all invoices are paid late”.  However, here are some simple strategies small business owners can put in place to encourage payments being made on time.


  • Choose the right invoice template

You will want to pick a template that is easy to read and contains all the relevant information. By making sure the invoice contains a correct description of the work, delivery date, client requirements (such as a purchase order number), and due date, you can minimise any confusion had by the client. The delay in going back and forth to clear up any discrepancies can add time to the process, and you could miss the next pay run.

  • Invoice right away

Your clients can’t pay if you haven’t sent the invoice. It’s best to send them out as soon as the work is completed, that way the terms of agreement and invoice specifications are fresh in both your mind and the mind of your client.

  • Offer a range of online payment options

One way to get paid quicker, is to make it as easy as possible for them to pay you. Multiple options like PayPal and credit cards allow the client to choose their preferred method. If it’s something they’re familiar with, most likely they’ll feel more comfortable and pay you faster. Research from Xero has found that if you offer the above options, you’ll be paid around 20 days sooner than if you didn’t.

  • Enforce late fees

Charge client late fees on any unpaid invoices to encourage on time payments. In order for this to work, you must make it clear to the client at the start of the process before you start business. You should further reinforce this by stating the fees on your invoice in the payment terms section.

  • Chase payments

It's important to be on top of late payments, once an invoice becomes past due, send an email confirming the invoice is late and reminding them of payment methods. It's important not to pester the client in the first few days, following up once a week is a good start. However, if several weeks go by and there is still no payment, you can gain legal advice if a payment is not made by a final deadline.

For any small agency, unpaid invoices can be one of the most frustrating and off-putting issues. The truth is, there is no perfect solution to avoid late payments. However, its always best to remain calm and keep up regular communication with clients to ensure you both know what needs to be paid and when by. Implementing the above strategies is a great starting point if you are struggling to collect payments from clients.

Another option for you would be to streamline and simplify your processes through outsourcing your back office. With accompanying recruitment industry specific software, the invoice process could be made both more manageable and efficient.

You could also consider an industry specific funding option, meaning experts would be responsible for the invoicing and collecting in of funds, improving your cash flow considerably.


How we can help you with  funding your temp recruitment business



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