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Unpaid Bills- The Biggest problem faced by Small Business

Did you know that 58% of freelancers have not got paid for their work?

According to The World’s Longest Invoice, an initiative by the Freelancer’s Union in 2012, around 71% of freelancers struggle to get paid. What cost them was a huge loss of money, based on the records.

Here is a graph that shows how unpaid invoices have struck different sectors, based on the data provided by The World Longest Invoice.

graph illustrating  how unpaid invoices affected industries

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From the above graph, it is evident how big is the problem of unpaid invoices for freelancers and SMEs. Although this graph shows how different industries around the world are affected by this crisis, the picture is no different or even worse for Indian SMEs.

Now, let us get straight to the point. As a freelancer, you certainly would know how frustrating it is when you are not paid on time. And, the most probable questions that you might start thinking over would be:

In this blog, we have come up with a solution to help you out of this situation.

This blog is broadly divided into 2 sections

  • How can you avoid getting into this trap of unpaid invoices?
  • What needs to be done in case you have unpaid invoices?

Take a look at them in detail and let off the hook of unpaid invoices.

How can you avoid getting into the trap of unpaid invoices?

make sure your clients are legit
  • Ask your network: Know your client before you make a contract with them. Check with your social network who are in your line of work about your client.
  • Check Internet & social media: Search the name of the company and check whether there are any negative reviews or complaints against them.
enter into a contract
  • Make a legal binding with your client: Sign a contract with your client and do it carefully so that you’ll have legal backing when a nonpayment issue comes.
payment in advance
  • Ask For Payment in Advance: Consider asking for payment in advance when you sign a contract.
  • Partial Payments: If not full payments, ask for milestones or partial payments so that you can avoid risks of being unpaid by your client.
invoice properly using invoice generator
  • Do online Invoicing : Switch from paper-based to digital invoices using invoice software or invoice generators that are available online. There are many available in the market both paid and free. If you want to create just 4-5 invoices for free you can choose zoho. But, for more invoices you will be charged. For creating invoices for free you can go for Zenys invoice generator
  • Track invoices: Using an online invoice creator you can track invoices and payments that help you know which all clients owe you.
  • Make an invoicing routine: Always have a plan and time schedule when you do invoicing and stick to it. This lets you be on track with your client’s payment cycle.

What needs to be done in case you have unpaid invoices?

1.Friendly Reminder

  • Send a Friendly reminder via email or over the phone to your client when they haven’t paid within the agreed 30 day period. Politely, ask for the reason for their delay of payment.

2.Letter Before Action:

If you still haven’t received any response from your client after you have sent a reminder to them, send a letter before action stating the following details:

  • Service provided including dates and the invoice reference
  • Charge for your service
  • How long they have owed the money
  • Steps you’ll take for unpaid service
  • Payment details
  • The timescale of the payment.

3.Go Legal:

Get engaged with a lawyer and file a lawsuit against your clients if none of the steps above is of success to you.

If you have any queries regarding filing an application check out https://taxguru.in/corporate-law/msme-samadhaan-delayed-payment-monitoring-system-faqs.html

Above all of this, an important step that you should never miss out on, that can most likely settle this issue, is making your business look professional.

How?

Send Professional invoices and get paid on time

zenys sample invoice format

We want to introduce you to a tool that helps resolve most of the issues faced by freelancers. Use an online invoice generator to create invoices and send your clients the most professional looking ones . With a free, online invoice software like Zenys invoice generator you can create unlimited invoices for free.

Zenys invoice software makes sure your job of sending invoices is hassle-free. Try creating a sample now with Zenys and enjoy invoicing with us.

Zenys also provides you with features that help you to keep in track of your clients details and resolve the issue of unpaid invoices to a great extent. You can track invoices, payments, schedule events and do many more with our all in one tool. Just Sign up for the software and make invoicing easier.


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