So in short, an outstanding invoice turns into a past due one when payment is late. Now a past due invoice is also an unpaid invoice, but it refers to an invoice that has passed its payment deadline. Outstanding invoices and past due invoices are often used interchangeably, but actually, these words mean two separate things.Īn outstanding invoice, as previously mentioned, is used when an invoice has been delivered, is waiting to get paid, but the payment due date has not come yet. Difference Between Outstanding and Past Due Invoices During the days that the buyer has not yet sent the cash, the invoice is referred to as an outstanding invoice. Payment terms dictate when the client is required to pay back the business.įor example, a payment term of net-30 means that the buyer has 30 calendar days to pay for the products and services they purchased. The time period it remains outstanding depends on the payment terms of the invoice. Track Outstanding Invoices with Accounting SoftwareĪn outstanding invoice is a term used for a sales invoice that has been sent to a client and is now waiting to get paid.How to Get Paid on Time for Outstanding Invoices.In this guide, we will be explaining these precautious actions you can take, along with any other questions you might have regarding outstanding invoices. If you’ve ever had the unfortunate luck of dealing with unreliable clients, you’ve probably dealt with cases where an outstanding payment has become overdue.Īs frustrating as that situation may be, there are some measures you can take to prevent outstanding invoices from turning into bad debt. Managing them effectively and taking the stress out of late invoices is vital as it will leave you more time to run your business, plan future strategy and enjoy your success.When you issue an invoice and are on the wait for payment, this invoice is referred to as an outstanding invoice. Instead of waiting between 30 and 90 days for a customer to pay, your business can access the cash immediately giving you peace of mind and the cashflow to continue business operations.Ĭhasing invoices, whilst a chore, is important because your clients need to know that you value your work, goods and services. ![]() ![]() When your customer pays and the funds are received by your debtor finance provider, they’ll remit the remaining 10 per cent minus a small fee to compensate for early funding. Invoice financing allows you to have up to 90 per cent of your verified outstanding invoice amounts paid up front, often within 24 hours. If you find yourself often dealing with late payments it might be worth looking at alternatives to reduce the financial impact and strain those delays are putting on your business. This will force the debtor to respond as failure to do so will result in the Court awarding your claim. This is a legal document that sets out how much you claim your debtor owes you and is lodged with the Courts. Another option is to start a court case by lodging a statement of claim. The final recourse is to refer to a debt collection agency. There are requirements and restrictions surrounding this process so make sure you’re across applicable late payment laws and know your rights. If they refuse the request or fail to respond now might be the time to implement a late payment fee or accumulate interest on the amount owed. Explain your situation and work together with your debtor to agree on a time for them to make payment. Start by sending another email for outstanding invoices, clearly stating that you are requesting payment due (this makes sure there’s a written record of the request). ![]() Most cloud based accounting platforms provide automated invoice reminders which allows the user to tailor the messaging at each touch point. While you are well within your rights to chase an invoice as soon as it falls due, consider sending a follow-up email or a reminder a few days after the due date. A polite reminder email is the best place to start including all the right information and addressed to the right person. It also gives you the ability to configure automatic reminders as soon as the invoice is due or late for payment. Electronic invoices ensure an accurate record is kept and that the recipient has all the required information to make their payment instantly. Consider implementing an online accounting system which includes e-invoicing.
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