Why invoicing can lead to bad debt

Why invoicing can lead to bad debt

For some businesses, there’s no getting away from invoicing. But that doesn’t mean they shouldn’t try. Invoicing is time consuming, stressful, and not good for cash flow. Business owners waste time writing up invoices and then chasing them up, sometimes to no avail and their business has to wear the cost of a debt.

If a business can offer mobile, online, credit and debit card options, it should. For instance, if a lawn-mowing business can offer its clients an on-the-spot payment solution, those clients are probably going to prefer it. People like to pay immediately for a job well done, instead of waiting for an invoice or writing out a check.

Most retail businesses have several payment options available (and I can’t remember the last time I saw one that accepted checks) but for B2B businesses, invoicing remains a commonly used payment option.

If there are other options, they’re worth investigating. Even if a business still has to generate invoices, they can encourage their clients to pay using credit or online options simply by including those details on the invoice. Then they’re not waiting for a check to arrive that will then take a week to clear.

Invoicing customers means essentially extending them credit. That’s why it’s important to have robust systems in place, including credit checks, to ensure that they’re offering credit to customers who will pay.

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Glen Senior
Glen Senior

CEO Glen Senior has been helping small businesses start and grow since 1989. Along the way, he has published 6 books on small business development and business planning, created training courses, built e-learning platforms, and developed Microsoft USA’s Small Business Plus program which was delivered into 9 countries.Since 2005 Glen has focused on the banking sector and has built up an extensive knowledge of how banks can engage with the small business segment. He has presented at a number of small business banking conferences and is sought out as an opinion leader in this space.