Understanding Payment Terms on Invoice Example for Procurement

Payment terms on invoice example for Procurement

are you tired of chasing down late payments  from me construction clients wondering how   to streamline your invoicing process to keep  your cash flow healthy or maybe you're just   looking for proven strategies to ensure  that you get paid on time every time hi   I'ma Taylor an accountant specializing in helping  construction businesses like yours manage their   finances effectively welcome to my channel I  share tips strategies and insights to help you   grow your construction business and today we're  diving into a very important topic collecting   invoice payments in construction so grab your  hard head and uh let's get started construction   projects involve significant upfront costs  including materials labor equipment without   a steady flow of cash these expenses can quickly  pile up leading to financial stress and project   delays and nobody wants that so first thing first  let's talk about your invoices a clear detailed   invoice can make a huge difference on how quickly  you get paid when creating an invoice you have to   make sure to include all the necessary details  project descriptions itemized list of services   and materials your due dates and payment terms  let's take a look at a real world example John   my client before we streamlined his invoicing  process payments were always delayed we started   using detailed invoices and saw a significant  improvements client really appreciated the clarity   and payments started coming in a lot faster and  that was our whole main goal next let's discuss   the importance of setting clear payment terms  this step is important because both you and your   clients need to be on the same page common payment  terms in the construction industry include net 30   days which means the payment is due 30 days after  the invoice date not ideal additionally consider   including late fees to encourage timely payments  all please discuss these terms with your clients   before starting the project and include them into  the contracts and into invoices I recently had a   great conversation with a construction attorney  about the importance of clear contracts so check   out that video on my channel lots of good nuggets  in there with one of our clients we added 1 and a   half% late fee to the overdue payments and that  reduced the number of late payments we received   so that was good another effective strategy is  offering multiple payment out options the easier   it is for your clients to pay the more likely  they are to do so promptly so consider accepting   various payment methods such as uh credit cards  a transfers checks onl payment platforms like   PayPal or stripe this flexibility can make a  big difference but at the same time do not shoot   yourself in the foot if the invoice amounts are  large and you let the clients pay with credit card   the fees will be way too large unless of course  you want to to add these fees to the invoice   total a is your best friend in this case of  course you can accept checks but then that is an   edit headache uh for you and your client and will  play a role in delaying the cash inflow you need   to have great communication Channels with your  clients too to make sure they understand what the   payment methods are used and what the terms are  automation also can save you time and ensure that   nothing falls through the cracks let's look at  how you can automate your invoicing process many   accounting software options allow you to set up  automated invoices and reminders like QuickBooks   online and this ensures that the invoices  are sent out on time and the follow-ups are   consistent switching to that kind of invoices  was a GameChanger for one of my clients we no   longer had to worry about manually sending their  reminders and it significantly reduced our overdue   invoices building strong relationships with your  clients like we talked it can help ensure timely   payments good communication in Ross they go  a long way regular updates transparency about   Project's progress and being responsive to C  client inquiries can uh really have positive   relationship between you and the client despite  your best efforts though there will be times when   payments are late it's important to handle those  situations professionally so start with a polite   reminder email or maybe a phone call if that  doesn't work follow up with a more formal letter   consider also working with a collections agency  if the payment is sign significantly overdue and   in extreme cases you might need to take legal  action this is usually a last resort but it's   important to know what rights you have in options  ensure that your contracts include Clauses that   protect you such as lean RS Consulting with a  lawyer before starting a project can really help   you understand the legal framework and prepare  you for worst case scenarios and finally always   seek to improve your invoicing process maybe  gather feedback from your client and make adjust   ments as needed and there you have it collecting  invoice payments in the construction industry it   doesn't have to be a headache by implementing  these tips and learning from the experiences of   others you can ensure a smoother more efficient  payment process for your business if you found   this video helpful make sure to like subscribe and  hit the Bell icon so you don't miss out on future   videos and if you have any questions or topics  you'd like to us to cover drop a comment below   thank you for watching and  see you in the next video