Being a business, you will have to produce an invoice on. Also after the date of delivery of your supplies clearly show what goods or services have been supplied on what date and where to. Additionally your invoice is required to show if you are VAT registered an Invoice Date, the VAT charged and the VAT rate used and your VAT registration number. But what other information should be included on your invoice and what is the most critical thing to you and your business when trading business to business and offering credit terms to your customers and is often missed off the invoice?
 The answer is the credit terms you are offering and the date on which you expect payment to be made. This information makes your customer to pay you when you want him to. The presentation of your invoice to your customer is a very important first step after goods and services have been supplied in avoiding non-payment for those goods or services. That’s why your invoice must always state clearly the terms on which you trade and the date on which the invoice is due for settlement.
The second important step is the following-up of the invoice after it has been sent to the customer to ensure that it is paid in a timely manner. Moreover, contact with your customer should be a continuous process up until the point that payment is received. Beware of such situation if you issue an invoice and say in two months time it is still outstanding but since that time you have had no further contact with the customer you could well find you have a problem. In this way you may have a signed delivery note but they can claim they were unable to fully check the quality or quantity at that stage of the delivery. And now it is problem.
So what is the way out? Starting with follow-up with the customer a day? But is he satisfied with quality and quantity of the goods or services supplied, the value and terms of the invoice and the due date for payment? It is important to record dates of conversation who you spoke to and what was said. One more thing is to see that the invoice has been authorized and passed to the accounts department for payment on the due date.
The next contact is due for payment to confirm whether the payment is forthcoming. If the customer failures to send his payment then get a commitment from him that you can go back to him on. In case payment is not received it should be followed up say a week later. For obtaining longer credit i.e. signature not in, cheques in the post or a spurious queries in respect of the invoice customers may employ well-considered delaying tactics. Then find out who the signature is and when he will be next in the office, can you speak to him direct.
The only problem is that it is very time consuming in particular for a new or small business where the prime movers have many other roles and responsibilities in the running of the business. The service element of factoring can be so useful in this to small growing businesses in ensuring. And that is done to minimize the potential of non-payment. Also cash flow can be greatly improved by ensuring customers pay in a timely manner. Factoring companies specialize in credit control and sales ledger management.
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