This is the key to staying on top of your cash flow. Here’s how to keep the money you’re owed flowing into your business.
If someone doesn’t pay their invoice you’re left financing the cost of the job until it’s paid — which can be costly if you’ve paid for materials or staff to do the job.
Sending invoices and chasing debtors is part of getting the job done.
On each invoice you need to include:
If you’re GST registered, you also need to include:
But it’s a good idea to keep these for your records — and if you want to make a claim.
Tax invoice information (external link) — Inland Revenue
Tips to help you get paid on time:
If someone who owes you money is in financial stress, you’ll probably notice changes to their payment patterns, says Anna Chartres of Christchurch law firm Lane Neave.
“They’ll be deviating from your standard credit terms and conditions which they may have previously complied with. You might see that they are slow on payments, you have cheques which are being dishonoured, and that’s an early indication that something might be awry,” she says.
“Make sure you have terms and conditions of trade in place. If you’re supplying goods, it’s a good idea to grant a security over those goods and say that title in the goods — the actual ownership of the goods — doesn’t pass until you have been paid.”
If invoices aren’t paid on time:
Avoid these common invoicing pitfalls: