Getting paid feels good. Unpaid balances and overdue invoices, on the other hand, do not. Chasing clients for outstanding invoices can feel awkward and frustrating. But it doesn’t have to be.
How to prevent overdue invoices
Lay out all of the terms and expectations early on in your agreement. If the terms are clear, mutually understood, and in writing, there should be no misunderstandings or disagreements when it comes time to request payment.
Make your invoices easy to understand and therefore easy to pay. Be sure to list the original invoice date, number, subject, amount, and due date as well as accepted forms of payment and contact information. If customers can pay online you should provide a link so that the payment is just a click away!
Try early bird discounts. Clients will have an incentive to pay if you give discounts for paying early.
Use Google email templates if you’re stuck. It can be hard to come up with the right words to say when asking for an unsettled payment. If you google “overdue invoice email templates,” you can find dozens of polite, yet firm, sample emails to use.
Don’t be afraid to ask for payment. It’s not rude, it’s simply a business transaction that needs to be honored.
How to handle overdue invoices
Automate it. There are several automated solutions, like Xero, that will automatically send out reminders for unpaid invoices. However, if you don’t want to pay for a software, you can set up reminders for yourself indicating when payments are due and then contact clients using one of the templates mentioned earlier.
Offer a payment plan. A payment plan can put your customers at ease when it comes to paying, with the knowledge that they now have additional time to do so.
Call them. If they answer, you can politely ask about their situation. If you show concern for their circumstances and are understanding of their situation, by offering an extension or an alternative way to pay they may be more understanding of your right to get paid.
It is our hope that by implementing these tips, you’ll be getting paid both easier and faster. But the advice mentioned here is nothing compared to variety of advisory services we provide at Alfano & Company. If you’d like assistance in developing a comprehensive strategy for improving your business, contact us!