21 Jul 2006
The Better Payment Practice Group (BPPG)
warns that businesses are putting themselves at risk of late payment
by not issuing invoices
promptly following delivery of goods and services. A survey by
the Group found that one in 10 businesses wait two weeks or more
before invoicing their customers.
The poll, which was held on
the BPPG’s website, www.payontime.co.uk,
asked businesses how soon they issue the invoice after receiving
confirmation from the customer of receipt of goods or services.
Of the 341 respondents, 11% stated that they usually invoiced two
weeks
or more after confirmation of receipt. A further 19% waited until
the end of the month before issuing the invoice. The survey also
split respondents by number of staff and found that small businesses
(with 10-49 employees) were quickest to invoice, with 52% doing
so within 24 hours, while medium (50-249 employees) and large (over
250 employees) firms were slowest, with 15% not invoicing for
two weeks.
James Meyrick, member of the Better Payment Practice
Group and
small business policy adviser for the Association of Chartered
Certified
Accountants (ACCA), commented: “The invoice is the first
part of the collection process and it is essential that it is
sent out
as soon as possible after confirmation of receipt of goods or
services – preferably
within 24 hours. By not invoicing promptly, businesses are leaving
themselves open to abuse from late payment.
“Set invoices out logically and clearly, including the invoice date,
description of the goods or services provided, account number,
order number, amount due, date by which payment must be made, preferred
payment method and the address to which payment should be sent
(or account details for BACS). Always send the invoice to a named individual
and it is also useful to alert the debtor of your statutory
right to charge interest on late payment. The sooner the customer is aware
of the amount owed and the due date, the sooner they can set
the payment process in motion.”
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