How to Deal with Overdue Invoices

Having an efficient system in place for cash flow management is integral for the smooth operations of any company especially in such difficult times of Covid-19 when business is slow, and revenues are down. Since payment is the core factor that drives all businesses, we need to give due weight to this argument. A common, yet grave impediment that derails the cash flow management in every organization is the issue of unpaid or overdue invoices. Tackling an unpaid invoice without jeopardizing client relations is an art, for which the best accounting firms in Dubai can provide advice to the companies.

When the customers fail to pay their invoices or make any delay in the payment, the companies fail to accomplish their target on time. A robust way to avoid such a situation is to avail of the best accounting services in Dubai. Here are some useful tips from UAE accountants to tackle the challenge of overdue invoices:

i) Adoption of Perfect Accounting Software

Business owners need timely reminders in order to follow up with the clients who delay the payments. Accounting software could do the job. Apart from alerting the entrepreneurs, the software should also have the capability to send timely reminders to the clients. If the client delayed the payment due to forgetfulness, a reminder might help a lot in getting the payment.

ii) Always Maintain Ageing Report

Preparing and maintaining ageing reports help the companies to stay updated on overdue invoices. Ageing reports contain all the invoices to be received with the time duration until it’s paid completely. The report helps the organization to determine the customer’s financial capacity to pay off the overdue payments. In short, the ageing report helps companies to stay on top of slow-paying clients. Having access to the best accounting services in Dubai will help businesses in preparing and maintaining ageing reports.

iii) Have Dedicated Staff to Follow up

The companies should have a dedicated accounting staff to deal with invoices and to keep account of overdue invoices. It would relieve the burden of other professionals, letting them focus on their core competencies. It is advisable to have a dedicated department to deal with income receivable from the customer. The department staff would monitor the sale and invoices to ensure timely payment by customers. Hire efficient accountants in Dubai to ease the troubles with overdue invoices.

iv) Devise Robust Follow-Up Strategies

Chasing the clients for payments on unpaid invoices must be a priority, and strategies should be devised for successful follow-up with the clients. Such strategies would enable the organization to forecast the income it would receive in the future. A perfect strategy would be to conduct a thorough study about the customer to determine whether he could deliver the payments without delays. The best accountants in Dubai may come in handy for businesses in such situations. After rendering the service, if the client is not making the payment, send an e-mail. If the client is not responding, try to meet them personally and solve the issue.

v) Implement Payment Terms & Conditions

Before establishing a relationship with the customer, the companies should state all the terms and conditions regarding the invoice payments. It is okay to charge an advance amount from the customer and if possible offer some discounts if they agree to pay in advance. The client should be briefed about the penalties he would have to face if payments are delayed.