Freelancers urged to act early on unpaid invoices

Freelancers are flouting best-practice guidelines when it comes to outstanding invoices, potentially to the detriment of their cashflow and growth prospects, a study shows.

Rather than pursuing a client shortly after an invoice payment date is missed, freelancers are most likely to wait two weeks to a month before taking any action to address it.

In fact, accountancy software provider FreeAgent, which authored the study, found that almost a quarter of freelancers only chase a customer over an unpaid invoice once it falls between 14 and 30 days overdue.

Although one in six of such micro-businesses adhere to the age-old advice of chasing an unpaid invoice within the first week, 19% wait up to two weeks while 18% wait as long as two months.

Four per cent of freelancers say it takes them between two and three months before acting over an outstanding payment and, even worse for their cashflow, the same proportion admitted that they never pursue unpaid invoices at all.

“When you’re running a small business, it’s important to ensure that you get paid on time - and when invoices are overdue, you should really be chasing your customers up as soon as possible to request payment,” advised FreeAgent’s boss Ed Molyneux.

“If you’re not getting paid on time you won’t have the money you need to grow your business. Ideally you should be following up as soon as the payment deadline on your invoice has passed…which will help you get paid quicker and avoid any cash flow issues down the line.”

 

27th June 2013

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