Customer paying late payments are not doing any favour to businesses. Especially, if the business or company has just started or a start-up based initiative. Late payments cause an imbalance in the cash flow while simultaneously affecting future budgetary planning and also hampers business productivity costing time, energy and resources.

Irregular payment habits of customers propose challenges in on-going business and also makes it difficult in various aspects such as sell inventory, deliver goods, excel customer service and be an after-hours collection agent.

Let’s discuss few of the effective ways that might help to get back on payment-track and a brief solution to deal with slow paying customers.

Tighten Payment Terms:

As we all know that some people are just meant to be either late or late in completing tasks may it be late to work, not punctual to attend social functions or merely late to make a payment. In such scenario, adjusting your payment terms or re-negotiating the deal and getting it down from 30 days to 15 days might help you to receive payment on-time. This will increase the chances of them adhering to your payment terms and to pay on-time, which is in a way very crucial for your business to run smoothly.

Levy Late Payment Charges:

It depends from company to company, whether to bill customer/vendor late payment charges depending on the customer’s past payment records or how strong is the business relation. Of course, you can waive-off the charges if it is a one-time or very rare thing, but, if it’s an on-going or a regular thing for a particular customer, then its best for your business to put the strong foot forward and explain the payment terms for the same. Do it in a way that the customer does not feel offended as well as he still remains your customer and access services, as usual, just being more aware of the payment and not let it past-due.

Offer Various Payment Options:

Offering and accepting a range of payments gives clients more options and also benefits your business as it leaves lesser chances for them to avoid making payment on time. For e.g, Moon Invoice, an invoicing app offers the simplest solution in such scenario by providing multiple payment options to its customers. You also get the benefit of PayPal button support. Payments to business take only days to settle, making the process simple and more efficient.

Offering to pay via credit cards also gives customers sufficient time to make a full payment on their own terms. This option works best for the customers who cannot pay the balance off as quickly as your business need.

Track Invoices & Follow-Ups:

It is always beneficial for your business to opt for a service which lets you know when a customer has viewed your invoices. A quick glance to inform you that your invoice has been delivered and viewed relieves you from the thought of whether has it going to spam folder or still showing unread status.

Payment reminder feature helps you to keep a track of customers who and when they need to be reminded about the payment. This way identifying the slow-paying clients and taking necessary action upon it will ultimately result in improving your cash flow.

Here’s the list of few handy payment invoicing features offered by Moon Invoice:

1) Multiple Payment Methods

Add preferred payment processing channel for faster payments which improve your business cash flow. Also, get the benefit of PayPal button support.

2) Recurring Invoicing

Leave no room for error! With recurring invoices quickly generate daily, monthly or yearly invoices and also get a reminder about overdue invoices.

3) On-time Payments, Every Time

Always know beforehand about invoices & expenses becomes overdue. Easily automate payment reminder and get paid on time.

4) Bill In Any Currency

Speak your clients’ financial language with multiple currency options available. No obstacle in doing business by selling products or services overseas.

We welcome you to check Moon Invoice app, unique and first in its class to provide iCloud Sync for every kind of businesses and individual. With Moon Invoice you can ‘Try Before You Buy’ option to feel the one-stop solution for all your invoicing needs right into your hands.

Recurring Payments Vs Recurring Invoices

Recurring Payments	Recurring Invoices
Recurring payments charge the customer’s credit card account or debit card account on a predetermined schedule for the same amount as preapproved.	Send an invoice to your customer on a regular basis. The client receives the invoice but, money is not paid unless the customer approves.
A business that takes prepayment of money and sells a monthly subscription service and product. Subscription services are excellent examples of this.	A company that provides fixed services with billable hours is an excellent choice for recurring billing. For example law firms and consulting agencies.

Pros and Cons of Recurring Invoices

Pros	Cons
You eliminate the possibility of human error by automating the billing process. If you use a recurring invoice, you will not be concerned about forgetting to charge your customers for the things they ordered.	You must exercise caution while recurring billing to prevent issuing inaccurate pricing. This also holds for price changes that could take place right once an invoice is created.
If you provide your customers with the option for recurring billing, they are more likely to buy products regularly.	It could be difficult to cope with recurring invoices if a transaction fails for any reason.

Net 45	Invoice is due in full within 45 days with no early payment discount offered
2/10 net 45 terms	2% discount if you pay within 10 days; otherwise full payment of the invoice is due in 45 days
1/15 net 45 terms	1% discount if you pay within 15 days; otherwise full payment of the invoice is due in 45 days
1/10 net 45 terms	1% discount if you pay within 10 days; otherwise full payment of the invoice is due in 45 days
1/7 net 45 terms	1% discount if you pay within 7 days; otherwise full payment of the invoice is due in 45 days

Category	Net Method vs. Gross Method	Explanation
Calculation Approach	- Applies tax credits first; reduces taxable income before computing tax liability.	- Doesn't apply tax credits; computes taxable income without considering tax credits.
Tax Credit Eligibility	- Allows for greater likelihood of tax credit eligibility due to reduced taxable income.	- Limits tax credit eligibility because taxable income hasn't been reduced yet.
Itemized Deduction Requirement	- Lowers threshold requirement for itemizing deductions due to decreased taxable income.	- Raises threshold requirement for itemizing deductions due to higher taxable income.
Advantages	- Leads to lower taxable income and increases chances of meeting qualifications for other tax benefits.	- Results in higher taxable income compared to net method.
Disadvantages	- May miss opportunity to reduce tax burden if taxpayer doesn't itemize deductions or take advantage of tax credits.	- Increases taxable income and may result in higher overall tax bill.