6 Proven Strategies for Avoiding Late Payments and Cash Flow Problems
                     6 Proven 
Strategies for 
Avoiding Late 
Payments and 
Cash Flow 
Problems
Impact of Late 
Payments
Late payments can obstruct the 
smooth running of a company, and 
while overdue invoices may only be 
for a few clients, they can have a 
significant effect on the service 
provider. Especially for smaller 
businesses that have a challenging 
time cycling their own cash, big 
organizations that do not pay their 
dues on time can create a more 
significant issue.
Tips to Avoiding Late Payments and Cash Flow 
Problems
1 2 3 4 5 6
Do a Thorough Chase Overdue Manage Your Late Create a Separate Offer Early Payments Follow the Payment 
Background Research Payments Politely Invoices Vault for Incentives and Late Behavior of Your 
Contingencies Payment Charges Client
Do a Thorough 
Background 
Research
A thorough background check 
before offering your services to a 
business can help you dodge bad 
deals and react to critical risks to 
find their solutions. 
Business Credit Health Check can 
be crucial to offer credit terms to 
a company according to its 
current creditworthiness
Chase Overdue 
Payments 
Politely
Many small businesses are afraid to 
chase their overdue invoices out of 
being taken as rude or betraying their 
relationship with bigger firms. 
However, if you experience late 
payments from a company that was 
regularly paying initially, you should 
not get swayed by the initial habits and 
stick to the terms and conditions 
mentioned in the contract.
Manage Your 
Late Invoices
To get your payments on time, you 
should further create and send your 
invoices as soon as the client receives 
the service or product. Make sure the 
generated invoice is in the format 
requested by the customer, complete 
with all the essential details. Track 
your invoices as soon as they become 
overdue and chase them to get your 
customers to pay.
Create a Separate 
Vault for 
Contingencies
Even after building a revenue 
forecast, unexpected events can 
occur at any time, and you may 
need your 
credit risk management solutions. 
You should be prepared for such 
times by finding funding resources 
within the business, like from 
retained profits that remain 
undistributed to the shareholders. 
Offer Early Payments 
Incentives and Late 
Payment Charges
It is common for businesses to offer 
incentives like discounts and 
reimbursements if the client clears 
their invoice early. Many companies 
also charge late payment fees from 
companies, and many laws allow small 
businesses to incur interest on overdue 
invoices.
Follow the 
Payment Behavior 
of Your Client
Every business, whether small or 
large and B2C or B2B, can face 
challenges that can affect how 
they pay you for your services 
and products. Monitor your 
client’s behavior to understand if 
you can have risks by continuing 
your business with them.
Thank You
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