It’s a fact. The longer you leave not following up on overdue invoices, the less likely it is that you will get paid. However, many business owners feel uncomfortable asking for money… even though it is rightfully theirs.
Here are some tips on how to make payment chasing easier.
Send an email
Send an email shortly after the due date has passed. This can be set up to be sent automatically from your accounting package, so you don’t even have to think about it. You can choose to send the invoice again or a statement listing the overdue invoices. However, remember to do your receipting regularly so an overdue notice doesn’t go out if the invoice has already been paid.
Keep in mind who you are sending this email to. If you are sending it to the accounts department, they may have passed the original invoice on to the instigator for authorising, so a statement would be better. If the original invoice was sent to someone outside the accounts department for authorising first, send them the invoice again as it may just be that they have been busy.
Be polite and succinct. I use phrases like “friendly reminder” or “We don’t seem to have received your payment”.
Make a phone call to accounts
If you don’t get an answer to your email within a couple of days, call the accounts department. Tell them you are just checking if they have received the invoice as it is overdue. They will quickly enough tell you if it is someone else holding it up. If they don’t have the invoice, ask them if you can send them a copy so they can chase up the appropriate person or if they have a suggestion on what to do next. See if you can get a suggested time frame in which it will be paid.
Follow up with an email or a phone call
Depending on the answer to your previous phone call, follow up with an email or another phone call if the debt isn’t paid by the promised date. You can offer a payment plan, even if the amount is relatively small. Or you can suspend services.
Or bypass these steps and get someone else to do the chasing
As a business owner, you are generally the one that the customer has the business relationship with. You want to maintain a good relationship. Getting someone else to follow up on the overdue invoice means that if the customer gets stroppy, they won’t get stroppy with you. It is expected that accounts people will follow up on overdue invoices. That is their job.
Be mindful of timing
Don’t let the follow-ups drag out. I find that two or three days after the due date is a good time for the first contact, especially if there is a weekend in between.
Consider making the emails and phone calls early in the week and before noon. Doing this late in the afternoon means that there is less likelihood that it will get attended to promptly.
Do you need help setting up a system or want someone to actually do the chasing for you? Get in touch and see how we can help. Book a chat.
