{"id":7795,"date":"2024-09-25T11:41:00","date_gmt":"2024-09-25T11:41:00","guid":{"rendered":"https:\/\/alwadiholding.com\/aw-egypt\/?p=7795"},"modified":"2024-09-26T10:39:06","modified_gmt":"2024-09-26T10:39:06","slug":"how-unpaid-invoices-affect-business-health","status":"publish","type":"post","link":"https:\/\/alwadiholding.com\/aw-egypt\/how-unpaid-invoices-affect-business-health\/","title":{"rendered":"How Unpaid Invoices Affect Business Health"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"7795\" class=\"elementor elementor-7795\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-59d02ca4 cspt-col-stretched-none cspt-bg-color-over-image elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"59d02ca4\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-5368e296 cspt-bg-color-over-image\" data-id=\"5368e296\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-50a148a3 elementor-widget elementor-widget-text-editor\" data-id=\"50a148a3\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.23.0 - 05-08-2024 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<p><span data-contrast=\"auto\">When clients neglect their financial commitments, the ripple effects can be devastating. Cash flow suffers, leading to difficulties in meeting operational costs and paying employees.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><p><span data-contrast=\"auto\">Furthermore, the <\/span><span data-contrast=\"auto\">unpaid invoice<\/span><span data-contrast=\"auto\"> creates a cycle of stress and uncertainty that can stifle growth and innovation. In an environment where timely payments are crucial for survival, ignoring the impact of unpaid invoices could very well lead to a company\u2019s downfall.\u00a0<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><p><span data-contrast=\"auto\">In this blog we will try to recognize and spotlight this issue, not just as an administrative headache but as a critical factor that directly influences their overall viability and success.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559738&quot;:240,&quot;335559739&quot;:240,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_69_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/alwadiholding.com\/aw-egypt\/how-unpaid-invoices-affect-business-health\/#Effects_of_Unpaid_Invoice_on_your_Business\" title=\"Effects of Unpaid Invoice on your Business:\u00a0\">Effects of Unpaid Invoice on your Business:\u00a0<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/alwadiholding.com\/aw-egypt\/how-unpaid-invoices-affect-business-health\/#1_%E2%80%93_Reducing_Timely_Cash_Flow\" title=\"1 &#8211; Reducing Timely Cash Flow:\u00a0\">1 &#8211; Reducing Timely Cash Flow:\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/alwadiholding.com\/aw-egypt\/how-unpaid-invoices-affect-business-health\/#2_%E2%80%93_Possibility_of_Increasing_Bad_Debts\" title=\"2 &#8211; Possibility of Increasing Bad Debts:\u00a0\">2 &#8211; Possibility of Increasing Bad Debts:\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/alwadiholding.com\/aw-egypt\/how-unpaid-invoices-affect-business-health\/#3_%E2%80%93_Cost_of_Efforts_and_Resources\" title=\"3 &#8211; Cost of Efforts and Resources:\u00a0\">3 &#8211; Cost of Efforts and Resources:\u00a0<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/alwadiholding.com\/aw-egypt\/how-unpaid-invoices-affect-business-health\/#Indirect_Effects_of_Unpaid_invoice_on_your_Financial_Statements\" title=\"Indirect Effects of Unpaid invoice on your Financial Statements:\u00a0\">Indirect Effects of Unpaid invoice on your Financial Statements:\u00a0<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/alwadiholding.com\/aw-egypt\/how-unpaid-invoices-affect-business-health\/#1_%E2%80%93_Decreased_Liquidity\" title=\"1 &#8211; Decreased Liquidity:\u00a0\">1 &#8211; Decreased Liquidity:\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/alwadiholding.com\/aw-egypt\/how-unpaid-invoices-affect-business-health\/#2_%E2%80%93_Delayed_Revenue_Recognition\" title=\"2 &#8211; Delayed Revenue Recognition:\u00a0\">2 &#8211; Delayed Revenue Recognition:\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/alwadiholding.com\/aw-egypt\/how-unpaid-invoices-affect-business-health\/#3_%E2%80%93_Higher_Borrowing_Difficulties\" title=\"3 &#8211; Higher Borrowing Difficulties:\u00a0\">3 &#8211; Higher Borrowing Difficulties:\u00a0<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/alwadiholding.com\/aw-egypt\/how-unpaid-invoices-affect-business-health\/#What_to_do_to_Prevent_Late_payments\" title=\"What to do to Prevent Late payments:\u00a0\">What to do to Prevent Late payments:\u00a0<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/alwadiholding.com\/aw-egypt\/how-unpaid-invoices-affect-business-health\/#1_%E2%80%93_Perform_Credit_Checks\" title=\"1 &#8211; Perform Credit Checks:\u00a0\">1 &#8211; Perform Credit Checks:\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/alwadiholding.com\/aw-egypt\/how-unpaid-invoices-affect-business-health\/#2_%E2%80%93_Define_Payment_Terms\" title=\"2 &#8211; Define Payment Terms:\u00a0\">2 &#8211; Define Payment Terms:\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/alwadiholding.com\/aw-egypt\/how-unpaid-invoices-affect-business-health\/#3_%E2%80%93_Ask_for_a_Deposit\" title=\"3 &#8211; Ask for a Deposit:\u00a0\">3 &#8211; Ask for a Deposit:\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/alwadiholding.com\/aw-egypt\/how-unpaid-invoices-affect-business-health\/#4_%E2%80%93_Prevent_Working_with_Non-payers\" title=\"4 &#8211; Prevent Working with Non-payers:\u00a0\">4 &#8211; Prevent Working with Non-payers:\u00a0<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/alwadiholding.com\/aw-egypt\/how-unpaid-invoices-affect-business-health\/#How_to_Enhance_your_Credit_Policy\" title=\"How to Enhance your Credit Policy:\u00a0\">How to Enhance your Credit Policy:\u00a0<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/alwadiholding.com\/aw-egypt\/how-unpaid-invoices-affect-business-health\/#1_%E2%80%93_Establish_a_Collection_Department_Most_Expensive_Higher_Efficiency\" title=\"1 &#8211; Establish a Collection Department: (Most Expensive &amp; Higher Efficiency)\u00a0\">1 &#8211; Establish a Collection Department: (Most Expensive &amp; Higher Efficiency)\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/alwadiholding.com\/aw-egypt\/how-unpaid-invoices-affect-business-health\/#2_%E2%80%93_Subscribe_to_a_Collection_Software_Moderate_Cost_and_Moderate_Efficiency\" title=\"2 &#8211; Subscribe to a Collection Software: (Moderate Cost and Moderate Efficiency)\u00a0\">2 &#8211; Subscribe to a Collection Software: (Moderate Cost and Moderate Efficiency)\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/alwadiholding.com\/aw-egypt\/how-unpaid-invoices-affect-business-health\/#3_%E2%80%93_Outsource_a_Collection_Agency_Lower_Cost_Higher_Efficiency\" title=\"3 &#8211; Outsource a Collection Agency: (Lower Cost &amp; Higher Efficiency)\u00a0\">3 &#8211; Outsource a Collection Agency: (Lower Cost &amp; Higher Efficiency)\u00a0<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Effects_of_Unpaid_Invoice_on_your_Business\"><\/span><span style=\"font-size: 24pt\">Effects of Unpaid Invoice on your Business:\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2><p>\u00a0<\/p><h3><span class=\"ez-toc-section\" id=\"1_%E2%80%93_Reducing_Timely_Cash_Flow\"><\/span>1 &#8211; Reducing Timely Cash Flow:\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h3><p><span data-contrast=\"auto\">Promptly receiving payments is crucial for managing your cash flow. You have commitments to pay others on specific dates, so it&#8217;s important to balance your incoming and outgoing payments. Late payments can negatively impact your cash flow ability to meet your own financial obligations and may result in additional fees or interest.<\/span><span data-ccp-props=\"{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:0,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><h3><span class=\"ez-toc-section\" id=\"2_%E2%80%93_Possibility_of_Increasing_Bad_Debts\"><\/span><span style=\"font-size: 18pt\">2 &#8211; Possibility of Increasing Bad Debts:\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3><p><span data-contrast=\"auto\">With time goes by, <\/span><span data-contrast=\"auto\">unpaid invoice<\/span><span data-contrast=\"auto\"> could turn into bad debts which means actual and direct losses not just a considerable thing, you should be assertive with factor, bad debts are simply the money you should gain from selling your services or products, if no collection occurred your revenue stream will suffer.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><h3><span class=\"ez-toc-section\" id=\"3_%E2%80%93_Cost_of_Efforts_and_Resources\"><\/span><span style=\"font-size: 18pt\">3 &#8211; Cost of Efforts and Resources:\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3><p><span data-contrast=\"auto\">Waiting for <\/span><span data-contrast=\"auto\">unpaid invoice<\/span><span data-contrast=\"auto\"> to be recovered can cost you additional money that result at the end of not receiving the actual amount you should get from your sales, by utilizing collection efforts such as software, internal department or outsource is extra cost, instructing your employees to focus on collection tasks such as accountants, sales reps or account managers will affect their productivity.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><h2><span class=\"ez-toc-section\" id=\"Indirect_Effects_of_Unpaid_invoice_on_your_Financial_Statements\"><\/span><span style=\"font-size: 24pt\">Indirect Effects of Unpaid invoice on your Financial Statements:\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2><p><span data-contrast=\"auto\">Other aspect you should be aware of is your financial records, for example your statements may harm your stock prices if it\u2019s not looking very well, it may weaken your position if you seek credit or going into a new partnership, so <\/span><span data-contrast=\"auto\">unpaid invoice<\/span><span data-contrast=\"auto\"> could indirectly affect your firm papers as follows:<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><h3><span class=\"ez-toc-section\" id=\"1_%E2%80%93_Decreased_Liquidity\"><\/span><span style=\"font-size: 18pt\">1 &#8211; Decreased Liquidity:\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3><p><span data-contrast=\"auto\">A decrease in cash and cash equivalents can negatively affect the company&#8217;s liquidity ratios. It also led to a cash flow shortage to meet short-term obligations especially.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><h3><span class=\"ez-toc-section\" id=\"2_%E2%80%93_Delayed_Revenue_Recognition\"><\/span><span style=\"font-size: 18pt\">2 &#8211; Delayed Revenue Recognition:\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3><p><span data-contrast=\"auto\">The <\/span><span data-contrast=\"auto\">unpaid invoice<\/span><span data-contrast=\"auto\"> can delay the recognition of revenue, affecting the company&#8217;s top-line growth and profitability. it also Impact on Income Statement by leading to a lower gross profit margin and potentially a net loss.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><h3><span class=\"ez-toc-section\" id=\"3_%E2%80%93_Higher_Borrowing_Difficulties\"><\/span><span style=\"font-size: 18pt\">3 &#8211; Higher Borrowing Difficulties:\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3><p><span data-contrast=\"auto\">First thing banks or credit company checks when you applying for a loan is your financial statements, having huge amounts of unpaid invoices and uncollectable accounts receivable will impact your position of acquiring the desirable credit to facilitate your project, expansion or whatever the credit is required for, it could be rejected or implementing higher interest rate because of uncertainty of your ability to have better liquidity and cash flow ratio due to this <\/span><span data-contrast=\"auto\">unpaid invoice<\/span><span data-contrast=\"auto\">.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><h2><span class=\"ez-toc-section\" id=\"What_to_do_to_Prevent_Late_payments\"><\/span><span style=\"font-size: 24pt\">What to do to Prevent Late payments:\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2><h3><span class=\"ez-toc-section\" id=\"1_%E2%80%93_Perform_Credit_Checks\"><\/span><span style=\"font-size: 18pt\">1 &#8211; Perform Credit Checks:\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3><p><span data-contrast=\"auto\">Before starting a business relation, you should assess if this relationship is going to be beneficial for your business or will cause you a lot of problems, the key indicator for this decision lies in the credit report you should conduct because most probably you would be selling your product on credit and after so all the challenges begin if your clients have unwell credit scores.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><h3><span class=\"ez-toc-section\" id=\"2_%E2%80%93_Define_Payment_Terms\"><\/span><span style=\"font-size: 18pt\">2 &#8211; Define Payment Terms:\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3><p><span data-contrast=\"auto\">Back up yourself in the conditions and terms of contracts, you should define strict payment terms especially if you are selling on credit and for low credit score clients, this practice is way better instead of implementing higher interest rate or fees that could affect the deal.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><h3><span class=\"ez-toc-section\" id=\"3_%E2%80%93_Ask_for_a_Deposit\"><\/span><span style=\"font-size: 18pt\">3 &#8211; Ask for a Deposit:\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3><p><span data-contrast=\"auto\">If your clients are uncomfortable with the payment terms arranged, you may ask for a deposit to ensure some credit facility for your accounts until you receive the rest of the amount, this would be a much better option for both dealers.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><h3><span class=\"ez-toc-section\" id=\"4_%E2%80%93_Prevent_Working_with_Non-payers\"><\/span><span style=\"font-size: 18pt\">4 &#8211; Prevent Working with Non-payers:\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3><p><span data-contrast=\"auto\">Considering as a last resort after multiple amicable trials with hardship payers, you may finish your business transactions after collecting your firm&#8217;s outstanding dues to prevent such implications from happening again.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><h2><span class=\"ez-toc-section\" id=\"How_to_Enhance_your_Credit_Policy\"><\/span><span style=\"font-size: 24pt\"><b>How to Enhance your Credit Policy:<\/b>\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h2><p><span data-contrast=\"auto\">Collection activity is the optimal solution for any unpaid invoice recovery whether on time or afterwards but the collection practice you will follow would depend on the budget and efficiency will bring to your business based on the nature of your industry sector.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><h3><span class=\"ez-toc-section\" id=\"1_%E2%80%93_Establish_a_Collection_Department_Most_Expensive_Higher_Efficiency\"><\/span><span style=\"font-size: 18pt\">1 &#8211; Establish a Collection Department: <span style=\"letter-spacing: 0px\">(Most Expensive &amp; Higher Efficiency)<\/span><span style=\"letter-spacing: 0px\">\u00a0<\/span><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3><p><span data-contrast=\"auto\">It will give you complete control overseeing the collection process and putting the strategies by yourself and empowered with deep understanding for your business and customers.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><p><span data-contrast=\"auto\">But nothing comes for free; you will charge high upfront costs for staffing, training, technology and insurance for the employees.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><h3><span class=\"ez-toc-section\" id=\"2_%E2%80%93_Subscribe_to_a_Collection_Software_Moderate_Cost_and_Moderate_Efficiency\"><\/span><span style=\"font-size: 18pt\">2 &#8211; Subscribe to a Collection Software: (Moderate Cost and Moderate Efficiency)\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3><p><span data-contrast=\"auto\">It will ease up the collection actions from reminders to follow-ups, it also can be integrated with your accounting system and more cost effective compared to a full-fledged department.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><p><span data-contrast=\"auto\">But on the other hand, you will have limited customization options depending on your industry sector and you won&#8217;t have the same level of personalized attention as a dedicated department.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><h3><span class=\"ez-toc-section\" id=\"3_%E2%80%93_Outsource_a_Collection_Agency_Lower_Cost_Higher_Efficiency\"><\/span><span style=\"font-size: 18pt\">3 &#8211; Outsource a Collection Agency: (Lower Cost &amp; Higher Efficiency)\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3><p><span data-contrast=\"auto\">With outsourcing the collection tasks, you will reduce overheads costs with access to specialized professional collectors and potential for faster recovery of <\/span><span data-contrast=\"auto\">unpaid invoice<\/span><span data-contrast=\"auto\">, add to that you can control the collection team as they&#8217;re acting as your in-house team, and it save your client relationship due to the involvement of a third party.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><p><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><p><span data-contrast=\"auto\">Ultimately, the best approach for your business will depend on your specific needs, but let&#8217;s face it, budget is the number one consideration. So that&#8217;s why we recommend the third option, especially if you are starting up your business, contact us now for more details about <\/span><span data-contrast=\"auto\">unpaid invoice<\/span><span data-contrast=\"auto\"> collection outsource.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:279}\">\u00a0<\/span><\/p><div id=\"eJOY__extension_root\" class=\"eJOY__extension_root_class\">\u00a0<\/div>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>When clients neglect their financial commitments, the ripple effects can be devastating. Cash flow suffers, leading to difficulties in meeting operational costs and paying employees.\u00a0 Furthermore, the unpaid invoice creates a cycle of stress and uncertainty that can stifle growth and innovation. In an environment where timely payments are crucial for survival, ignoring the impact of unpaid invoices could very well lead to a company\u2019s downfall.\u00a0\u00a0 In this blog we[&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":7796,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_joinchat":[],"footnotes":""},"categories":[165],"tags":[],"class_list":["post-7795","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-aw-receivable-management-service"],"acf":[],"jetpack_featured_media_url":"https:\/\/alwadiholding.com\/aw-egypt\/wp-content\/uploads\/sites\/7\/2024\/09\/Website-Blogs-pics-1-2-5.webp","_links":{"self":[{"href":"https:\/\/alwadiholding.com\/aw-egypt\/wp-json\/wp\/v2\/posts\/7795"}],"collection":[{"href":"https:\/\/alwadiholding.com\/aw-egypt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/alwadiholding.com\/aw-egypt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/alwadiholding.com\/aw-egypt\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/alwadiholding.com\/aw-egypt\/wp-json\/wp\/v2\/comments?post=7795"}],"version-history":[{"count":6,"href":"https:\/\/alwadiholding.com\/aw-egypt\/wp-json\/wp\/v2\/posts\/7795\/revisions"}],"predecessor-version":[{"id":7802,"href":"https:\/\/alwadiholding.com\/aw-egypt\/wp-json\/wp\/v2\/posts\/7795\/revisions\/7802"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/alwadiholding.com\/aw-egypt\/wp-json\/wp\/v2\/media\/7796"}],"wp:attachment":[{"href":"https:\/\/alwadiholding.com\/aw-egypt\/wp-json\/wp\/v2\/media?parent=7795"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/alwadiholding.com\/aw-egypt\/wp-json\/wp\/v2\/categories?post=7795"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/alwadiholding.com\/aw-egypt\/wp-json\/wp\/v2\/tags?post=7795"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}