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Timely Identification and Reminders of Unpaid Bills

Unpaid Invoices refer to the bills that are still not paid or the arrears that still need clearance. When customers take any service from the service provider or buy some commodities from the manufacturer, they are charged a certain amount for the services rendered or product sale. Those service charges or product pricing are communicated to the customer via an invoice or bill. There is a specific period by which the customer is expected to pay the invoice amount. This period is referred to as the due date. If the customer fails to settle his bill payment within the stipulated due date, the bills become overdue or outstanding invoices.

When individuals, firms, or organisations face the grave issue of unpaid invoices, they draft different strategies in response. Some adopt less intensive strategies whereas others opt for a more aggressive approach for the procurement of unsettled bills. No matter which strategy you adopt, a prompt response is necessary to any amount that becomes overdue beyond a certain time. It is injurious to the client-business relationship. Moreover, it is a financially chaotic situation for businesses. Unpaid Invoices lead to a low liquidity status for the organization. No liquid cash generation means that the company might likely go bankrupt if accounts receivables continue to pile up. It implies that a company cannot continue its business operations when it is unable to finance it or pay its service providers. 

Hence, the most important step for business owners is to keep a regular check on the invoices regarding the status of client payments. It helps in identifying the red signals, catering to them promptly, instead of waiting till the unpaid bills become a nightmarish trigger that makes the business reach the verge of closure. Such identification is not difficult in such technologically advanced times. Companies just need to employ an updated IT system, with relevant software, and designated IT employees who keep a systematic, and up-to-the-minute record of client billing, paid, unpaid, and overdue status. The owners just need to be vigilant in demanding a timely update of the status of accounts receivables.

The next step after identification is to send a well-timed reminder to the customer that his payment is late and behind the originally agreed-upon schedule. This initial reminder should neither be harshly communicated nor aggressively pursued. The most effective medium for such a subtle reminder is the internet. The service providers can send an email to highlight the client’s total bill amount, the originally agreed-upon payment date, and the number of days that have long gone past the due date. 

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In addition to the email, the concerned department can also contact the customer via a text message or social media application if he fails to respond to the sent email. Other sources of communication can be phone calls, fax machines, or traditional letters. However, if the service provider or manufacturer exhausts all his sources of communication, but fails to get a positive response or even a response from the customer, it’s time to switch to a more aggressive bill procurement strategy. Otherwise, the client is most likely to default on some of the altogether payments.

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