First Aid For Late Payments

Have you ever got to the time of the month when invoices become due, only to realise that some of your clients haven’t paid? You worry they might have misplaced their invoices, or that they might not have enough money to pay you right now. Maybe you should wait a few days and see if the money shows up?

That might seem like a good idea- but in reality, it means that your business will start to bleed money, and fairy quickly. To stop that from happening, you need to do some first aid on your finances. There are 4 steps to late payment first aid and we’re going to explain them here.

Double Check Your Invoices

Your first step should be checking that you have done everything correctly. Don’t automatically assume that clients are paying late because of their own errors. Go through your invoice process and ensure everything is correct, including payment terms and due dates. Ask yourself if your customer is happy with your services, or if they have had issues with payment methods. If there is something wrong on your end, make sure you resolve it before moving to the next step.

Send A Reminder

If your invoicing is all correct and you haven’t received payment, send your client a friendly reminder right away. After all, life is busy and people do just forget, so a reminder gives them a chance to pay you without embarrassment. It also gives them a chance to voice any concerns they may have about the service that has caused them to withhold payment. In your reminder, you need to:

• State the invoice number and due date.
• Say that you haven’t received payment.
• Ask when you can expect payment.
• Ask if they have any questions or concerns, and that they contact you to discuss them.
• Attach a copy of the original invoice.

Try to keep your tone polite but firm in this message, expressing understanding but reminding them that they do need to pay you. If you still hear nothing, it’s onto step 3.

Make A Call

We know a lot of people aren’t comfortable asking for payment over the phone, but it’s proven to be the best method for this type of client. If they have stayed silent after a friendly e-mail reminder, then you need a more immediate approach. In this call don’t assume anything, try not to get emotional or apologetic, and make sure you don’t hang up empty-handed. Get the customer to agree to a next step, whether that’s paying right away or agreeing to a payment plan. Make sure you set clear boundaries and deadlines so that you both know what’s expected. After this call, move straight on to step 4.

Send Follow-Up Notes

A verbal agreement is all well and good, but when it comes to debt collection you want everything in writing. Make notes of what is said during the call, and then send these to the client in a follow-up email. In particular, you should include:

• What is your customer’s next step to pay the overdue invoice?
• What is your next step to help the customer (if applicable)?
• When should those steps take place?
• When will you follow up to make sure those steps happen?
• What will happen if the customer doesn’t keep to the agreement?

By having everything down in writing, you have proof of what was agreed upon, along with a reference point if you need it. In many cases, these steps will be enough to prompt payment from the customer. But if it doesn’t, then they may just be the first in a longer process. If this is the case, you may need to hire a professional debt collector like us. we can help you communicate effectively with your customers and create a strategy to reclaim what you are owedTo find out more, just get in touch with the team today.