Agree on the billing path before work starts
Confirm the legal customer name, billing contact, purchase-order requirements, invoice format, payment method, and approval process. Record deposits, milestones, and any change-order procedure in the agreement. Make sure the person ordering the work can authorize it. For larger customers, an invoice sent to the wrong portal can remain unpaid even when the service team believes it was submitted correctly.
Issue an invoice someone can approve
Use a unique number, accurate dates, agreed description, payment instructions, and the supporting detail the customer requires. Reconcile the invoice with completed work and approved changes. Verify bank instruction changes through a known channel. Keep evidence of submission and correct rejected invoices promptly. Accounting records should show credit notes and disputes clearly rather than deleting the original transaction history.
Follow an aging-based review routine
Review unpaid balances regularly and assign each material invoice a next action. Separate missing paperwork, service disputes, incorrect amounts, and simple late payment. Contact the right person with a factual summary and a specific request. Escalate unresolved issues under the agreement and applicable law. Forecast collections using observed payment behavior; an overdue invoice is not reliable cash simply because it appears as an asset.
- Confirm customer approval and submission requirements in advance.
- Invoice promptly with accurate supporting documentation.
- Track disputes separately from routine late payments.
- Record commitments, follow-up dates, and collected amounts.
Questions to consider
Should I offer a discount for early payment?
Evaluate the cost against your margin and cash needs, and state the terms clearly. A discount should be a deliberate pricing decision rather than an improvised reaction to every late invoice.
Can I add any late fee I want?
No. Review the agreement and applicable law with an appropriate adviser before imposing fees or using collection methods. This workflow is operational guidance, not a legal determination.
Official sources and further reading
Use this guide to prepare questions and organize records. It does not determine eligibility, establish a professional engagement or guarantee a tax or business outcome.