How to Deal with Late Payments under GST?

How to cope with invoice late payment or invoice not paid is the most typical question that every businessman encounters. So, in this post, we’ll go through four different approaches to deal with payment delays:

Control the Payment Failures

The only way to maintain a healthy cash flow is to keep payment failures under control. Cash flow may be managed by keeping track of invoice payments and payments that are past due. You may use e-invoicing software to automate your e-invoicing journey and to keep track of invoices on a daily basis.

Learn about GSTrobo® e-Invoicing Software.

The second option is to figure out how your clients pay, which will allow you to remind them if their payment deadline has passed. This leads us to the following phase, which is follow-up.

Follow Up

When following up, keep in mind that there are various reasons why payments are being delayed. Waiting for payment, going through accounting transfers, and facing administrative delays are all regular issues. It, when following up on a payment that is past due, you must do so politely and professionally. You may alternatively provide the following alternative:

1. Extend the payment period
2. Payment in installments
3. Discount for early payment
4. Penalty for late payment

Just keep in mind that delivering solutions to clients is the most important aspect of follow-up. And to do so, you must first contact your client’s accounts payable staff, since they have the right to process the payment due. However, you can also automate this process using our e-invoicing product.

Be patient

After following up with the client’s AP department, you’ll have to wait a bit because processing the payment due takes time. Payment can be made in a variety of ways, including:

1. E-payment using UPIs or Cards
2. Cheque/DD/PDC

You just need to be patient and appreciate that your clients have their own companies to manage.

Issue Credit Note

If a business fails to pay within the agreed-upon time frame, you may issue a Credit Note for the amount due, and the recipient is obligated to reverse the credit.

Final Thoughts

Any missing payment is more than a violation of the contract because trade is the foundation of any country’s economy. Any payment default not only disrupts a company’s day-to-day operations but also has a negative influence on the economy.

As a result, it is essential that communication between the people involved be transparent, as this will reduce the likelihood of disagreements. Maintain a positive relationship with your clients so you don’t have to constantly chase them for payment.