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What is an overdue invoice, and what can be done about it?
Temps de lecture : 3 minutes
An overdue invoice is always a source of concern for a company. An overdue invoice means that the payment deadline has passed, but that the debtor has not yet paid. This is the starting point for collection proceedings. We explain everything you need to know about overdue invoices.
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What is an overdue invoice?
We talk about overdue invoices when the due date has passed and the debt has still not been paid by the debtor. Now it's time to start collecting, either by your company itself or via a specialized company such as a factoring company.
When receivables management is well managed in a company, an entire strategy is put in place before the due date and to limit the risk of non-payment, in particular with the help of management control tools. automate customer reminders .
What's the difference between due and overdue terms?
In terms of due dates, there are two types of invoice: invoices payable in arrears and invoices payable in arrears.
An invoice is said to be due when the invoice is issued before the service is rendered or the goods are delivered. This is the case, for example, for a maintenance service invoiced at the beginning of the year and paid 60 days in advance.
As a general rule, this type of invoice is not eligible for factoring, with a few exceptions.
On the other hand, a invoice in arrears is an invoice issued when the service or goods delivery has been completed. It is these invoices that can be financed through factoring.
What can you do about overdue invoices?
The invoice is said to be overdue when the payment deadline has expired . This may be expressly stated on the invoice or, failing that, set at the 30th day after issue.
When this time has elapsed and payment has not yet been made, it's time to remind your customer.
Here's how to do it, step by step:
Call back . Most of the time, unpaid bills are due to simple oversights or technical errors. The purpose of this telephone call is to remind the customer of his obligation.
Send the first dunning letter. If the phone call has been unsuccessful, it's time to send a reminder letter. More formal, it should be sent by registered letter with acknowledgement of receipt.
It must be drawn up with tact, because while it is important to collect debts, the commercial relationship with the customer must be preserved. It is therefore necessary to maintain a courteous, neutral tone.
If the first reminder letter has also gone unanswered, you can can still send a second and even third reminder letters.
If this amicable stage is still unsuccessful, you can initiate legal proceedings, starting with a formal notice to pay.
How can I avoid overdue invoices with Hero?
As you can see, unpaid invoices are a source of worry and uncertainty for any business. You can get away from it all by adopting Hero .
Hero is a payment solution that allows you to obtain payment for your customer invoices just 24 hours after they have been issued. It's a 2-in-1 solution, combining payment and online factoring.
And that's not all: the platform offers two payment facilities: deferred payment and payment in instalments. This means you can offer your customers the option of paying in 3 or 4 instalments, or after 30 or 60 days. However, you won't have to wait for these deadlines to obtain payment, as the platform will advance you up to 80% of the invoice amount. Then, once the customer has paid what is due, the platform retains the amount of the advance and the costs. Any remainder is paid back to the company.
An overdue invoice opens the door to a collection procedure that can be time-consuming and a source of tension for the business: in the worst case, it can lead to costly, business-damaging legal proceedings. Hero thus emerges as an ideal alternative for avoiding the perverse effects of a invoice due.
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