4 Tips on Getting Paid with the Right Invoice
When you engage in small business factoring invoice, the factoring company gives you an advance on what your customers are supposed to pay you. The typical top factoring company will usually advance you about 70-80% of the value of the invoice. When the customer pays in full, the rest of the money is sent to you after the factoring company takes out its fee.
If your customer pays late, then usually there’s an additional fee involved. And if your customers don’t pay at all, then you’re obligated to return the money that was advanced to you.
So it in your best interest to make sure that your customers pay. And did you know that you can increase your chances of getting paid just by improving your invoicing? Here are some tips that have resulted from studies involving hundreds of thousands of invoices:
- Put your logo on the invoice. Why shouldn’t you put your logo there? After all, it boosts your branding, and it’s another chance to increase the visibility of your logo and your brand.
But according to the study, an invoice that contains the company logo is actually 3 times more likely to be than an invoice that doesn’t have a logo.
There are several possible reasons for this. Perhaps your customer overlooks the invoice because it doesn’t look official enough, or perhaps the lack of a logo simply makes it look unimportant. But whatever the reason, it makes perfect sense to add your logo to all your invoices.
- Put the due date on the invoice. This is perhaps too obvious a tip, but you’d be surprised at just how many invoices lack this crucial piece of information. It was found in the study that up to 24% of invoices were sent out without an explicit due date at all!
It seems a logical conclusion that invoices without a due date are much less likely to be paid, and the study proves that conclusively. It was discovered that when the invoice contains an explicit due date, it is 8 times more likely to be paid on time. So put that date on the invoice, and make it prominent. Don’t just put the date on which the invoice was issued and then say that it is due on 30 or 60 days. The deadline has to be explicitly stated.
- Include the terms in the invoice. That means if you expect to be paid in 30 days, state it clearly on the invoice (along with the due date). It was discovered that when the terms are stated, the invoice is 50% more likely to be paid than if the terms were not there.
- Include only one name on the invoice. Address it to 4 people, and the invoice is 50% less likely to be paid. After all, people can see the invoice and figure that other people are responsible for paying it.
- Be polite. Use phrases like “please” and “thank you”. Invoices with these phrases are 5% more likely to be paid.
All these improvements on your invoice require very little effort on your part. But they can sure increase your chances that your small business factoring invoice gets paid!