Outstanding Invoice: What, Why, and Tips to Get Paid Faster!

“You have chased payments! Followed them! Waited to get paid- but still payments are pending? Time to take back the control and accelerate your process.”

Cash flow management plays a pivotal role for every business, and outstanding invoices sabotage it silently. Doesn’t matter if you are a freelancer or a seasoned entrepreneur- the game is not just about getting paid but is all about staying in the business. Unpaid bills not only delay your income but also ruin relations with your customers, raise operational inefficiency, and make growth look just next to impossible. 

As a business owner, you might have seen overdue invoices pile up with the absence of the right system in place. But don’t worry; the right plan and strategies can fix them all. It minimizes delays, encourages regular payments, and let’s you take complete control of your cash flow. 

This blog outlines what is an outstanding invoice, why they appear, and how to resolve them. Let’s scroll below to understand its meaning and smartly deal with them. 

What is an Outstanding Invoice- 2 Min Read! 

An outstanding invoice is that one friend of yours who borrows money from you saying, I’ll pay soon. But he has not paid yet. 

It refers to a bill you have sent to the client for the services he has already leveraged, but the payment is still pending. The payment still falls under the agreed terms, so it isn’t late, but it is still hovering. Until the payment isn’t done, it’s considered an outstanding invoice. 

Your system has too many unpaid invoices? It’s not a good sign! The trick is to understand when to follow up, chase, and strengthen your payment process so that your hard-earned money lies with you! 

Outstanding Invoices Vs Overdue Invoices: How Do They Differ? 

Hopefully, you understood the outstanding invoice meaning and how it differs from overdue invoices! Time to see how these unpaid bills impact your business! 

5 Reasons to Avoid Outstanding Invoices – Check Out Before Your Business Drowns! 

1. Unpaid invoices cause less inflow of cash, impacting your income levels. This, at times, results in delayed employee salaries, missed investment opportunities, and more. 
2. Too many pending accounts receivable raise red flags for stakeholders and banks, causing damage to your professional image. This hampers your peace of mind. 
3. Your expansion plans, budget strategies, and new commitments go on hold with pending bills. 
4. Longer waiting periods result in lower possibilities of payments being collected. 
5. With minimum or no follow-ups from your end, it results in clients deprioritizing your payments. 

Don’t let these outstanding invoices sink your business growth! Chase, follow up, and collect what’s yours- because your business depends on it! Let’s see the reasons why they appear! 

Why Do the Outstanding Bills Appear- 5 Reasons! 

1. Client neglect due dates or receivables are delayed. 
2. The invoice doesn’t clearly specify the payment deadline and terms. 
3. Businesses fail to take regular follow-ups, leading to unpaid bills. 
4. Misplaced invoices, missing invoicing numbers, and unclear records cause confusion for clients. 
5. The absence of an invoice tracking system and missed emails cause payments to be neglected. 

Since you know the ‘WHY’ It’s time to fix the ‘HOW’! No more excuses, let’s see five expert tips to get the Outstanding Invoices paid faster. 

How to Collect Outstanding Dues – 5 Strategies That Will Work For You! 

1. Facilitate Flexible Payment Modes!

• Multiple payment modes like cards, online, QR, etc., eliminate client excuses, encouraging instant transactions. 
• Both the client and the business entity as convenience play the pivotal role here. 
• With digital payments on the rise, allowing UPI transactions promotes instant fund transfers to your account. 
• Partial payment options like EMIs or instalments motivate clients who are low on funds to make payments in batches instead of avoiding invoices. 

2. Get a Personalized Collection Strategy!

• Automate redundant processes like email reminders, follow-ups, etc., to eliminate outstanding invoices. 
• If sending email reminders is not working out, make a friendly professional call to follow up on payments. 
• For multiple outstanding bills from a single client, send one main invoice that includes all the due payments in it. This ensures you are not bombarding your client with too many emails. 
• Sharing pending invoices over WhatsApp and SMS, too, that integrates the payment link. 

3. Plan Out to Avoid Overdue Invoices! 

• Though you are proactively sending follow-up emails, making calls, and even providing multiple payment gateways, some clients still fail to pay the bills. 
• For this, you need to plan some strict payment rules like late fees, putting pending deliverables on hold, etc. 
• Clients with overdue invoices will be blacklisted; this clause should be added to your agreement.

4. Incentivize Early Payments! 

• Specify the early payment terms on your invoice, like a 3% discount on payment within 20 days, etc. 
• Give cash-back offers for early payments to avoid outstanding invoices. 
• Boost your collection rate with additional service offerings on instant payments. 

5. Hire Debt Collectors 

• At times, constant follow-ups and chasing the clients for outstanding payments can turn your relations bitter. 
• In this scenario, the client might purposely delay your dues and keep you waiting. 
• So, get a debt collector on board to recover these outstanding dues, as their professional and strict approach forces the clients to transfer the funds. 
• However, these officials might charge some percent of the due amount to do so. 
• If this, too, fails, the final step is to hire a lawyer and take legal action. 

Outstanding Invoice eMail Example- Here’s How You Can Write!

How Accounting Software Can Help Manage Outstanding Invoices? 

• Schedule Payable Reminders
• Track Payment Status 
• Enhance Customer Experience 

Recommendation for You

GST Invoicing Rules for Job Work
Sales Invoice
Everything about Export Invoice

Let’s Conclude! 

Outstanding invoices are not just about documenting or paperwork. They talk more about missed payments, delayed success, and silent stress tests for your business. But don’t worry, you can get complete control of it! Understanding the reasons why they appear and how to tackle them will help you to stay ahead of overdue invoices. 

Read the blog and encourage timely payments from your clients to reduce too many outstanding invoices with you. 

Implement the given tack ticks today and optimize your invoicing process with us! Drop your payment receivable challenge in the comment below, and let’s resolve it together for you! 

Munim accounting and billing software solves all your payable receivable concerns in just a few clicks. Get started today! 

FAQs on Outstanding Invoices!

1. What is another name for an outstanding invoice? 

Unpaid invoice and open invoice are other names used to refer to outstanding invoices. 

2. How to ask for an unpaid invoice? 

Draft a polite yet professional email for your client addressing the due amount and deadline. Request the client to make the payment as soon as possible. 

3. Is an outstanding Invoice a liability? 

Yes, the unpaid invoices can be both assets and liabilities but not simultaneously. 

4. Can I integrate the payment link in the unpaid invoice? 

Yes, integrating payment links in the outstanding invoice helps to encourage timely fund transfer.