I think it’s safe to say that I have gotten to experience one of the biggest downsides of running a business…following up on late invoices!! The past two months have shown me such flames (if I can put it like that) with clients not paying invoices dating back far as November…imagine!!
I swear nothing is as irritating and a full time job (that is so unnecessary) like having to continuously make contact with a client reminding them of a due invoice. As much as this is a tedious process, it has to be done and one is entitled to their payment once they have carried out their work successfully!
This whole experience has been very enlightening and so educational, I thought the following advise can help a fellow business owner try and avoid such bad experience or the best way to handle it if you are in the same situation.
Set Your Terms & Conditions
I remember when I started I never included strict terms and conditions when it came to payments. I just took it for granted that clients should know that once I have done my part of the agreement, then it was up to them to abide to their agreement, to settle my invoice. Little did I know it doesn’t happen that easy. Now that I have learnt my lesson, every time I send an invoice I attach my terms & conditions document that clearly states that late payments will result in extra charge of a 10% increase on late payments after 30 days.
Stipulating such conditions will help you get your payments on time, as I’m sure no one wants to pay unnecessary extra costs.
Automate Your Reminders
For the first 30 days your invoice is due, send soft & friendly reminders. I use Wave Apps which is an invoice app that helps me send automated reminders on late invoices. You can customize your reminder messages in a tone you feel comfortable to send, which you feel will get through to you client. Automation allows it to happen without you stressing and using unnecessary time to send emails, when you could be focusing your energy on other things.
Time To Be More Firm
If the above moves have resulted to you still not being paid, its time to construct firm emails that will not come off as aggressive or too demanding. Your email should have the invoice details and state that it still has an outstanding xxx amount and that you could appreciate that the invoice is settled immediately as it’s already a month overdue. Your emails can also remind them of the terms & conditions of late payment resulting in a 10% increase fee and continue to attach an invoice with the 10% now added on it as the new due amount.
One thing I have done in the past when asking for payment is getting personal and seem as if I’m begging for payment, which I now understand its not working. Keeping the email simple and straight to the point will get your point across.
Give Them A Call
Sometimes emails can easily be ignored, so once you have done the best to follow up on your payment it’s time to give your client a call. Calling will allow you to find out why payment is late and when can you expect it and also remembering to still be firm and professional. Make sure you do not communicate with your client via sms or whatsapp messages as that will give off a casual approach and you don’t want that.
The last resort which we should all try and avoid is having to call up a lawyer to now take legal action or having to now go to Small Claims Court to make sure you get your payment. This might be dramatic and extreme but you are entitled to take legal action against unpaid invoices, since your client has failed to abide to an agreement with you.
Hopefully my advice will help you improve your process of following up on late payment and making sure you get paid on time.