If you’re concerned about receiving timely payments, you might be interested to know that your clients have preferences about receiving your invoices. When you can meet their preferences to increase your cash flow, isn't it worth it?
When is the best time to send your client an invoice?
Timing is Everything
According to recent research by Square, there are “hot” and “cold” times that are better or worse for sending invoices to clients. If you’re sending invoices at the end of the month or the beginning of the month, you’re likely hitting the “hot” times when your clients are already running their accounts payable. This timing is important to ensure your invoice is included in the AP run.
Freshbooks research adds to this, suggesting that the day of the week might matter, with invoices being sent on Tuesday getting paid faster. There are also studies about sending invoices weekly, instead of monthly.
The end of the year might be cold in more than just the temps outside, as your clients will be making arrangements to close their books for the year. The earlier you can get your final end-of-year invoices to your clients in December, the more likely they’ll get paid before New Year’s Day.
See Also: End of the Year Accounts Receivable Best Practices
What Works for Your Client?
Truthfully, if you want to send your invoices so they get paid faster, communicate with your client to determine the timing that works for them. They may be limited by the person who signs the checks and that person may be currently working remotely. They may also have preferences on HOW they receive your invoices with SMS invoices becoming more popular according to Square.
What Works for Your Business?
You must also consider what works for you. You may wish to invoice immediately upon the completion of a project. You may wish to invoice half upfront and the other half at project completion. Either way, it's important that you price out projects and send invoices in a way that will keep your business running. And again, keep the communication channels open so that you know how to follow up on late payments.
When Is the Best Time to Send an Invoice to Collections?
We've covered this question in another blog post (read here) but here are some general best practices if the invoice isn't paid on time:
- Send the invoice to your in-house collections team, if available, as quickly as possible
- After 90 days or if all attempts have been exhausted, send to third-party collections
- If the client is refusing to pay and/or negotiate, send it to third-party collections
You're not offering your services and time for free so don't be afraid to follow up first. Timing is everything but money is what keeps your business thriving. Let us know if Enterprise Recovery can help.
