Invoicing is one of those inevitable things every business encounters. It is the bill you send when the job is done, the document you use to charge for your work. In most countries, invoicing is regulated and required by law, so every company should keep such records for taxation purposes.
But invoicing should not be taken lightly. The process is more than just preparing invoices in your preferred invoicing software. It could take a significant amount of your time, so you should aim to streamline it as much as possible. Sending invoices is the easy part, but collecting the payments is sometimes very hard. Oftentimes you have to chase down clients for their payments.
The best way I deal with the late-paying customers? Follow-up reminders. Follow-up emails and phone calls hold great power and by far are the best solution when asking for late invoice payments. And you shouldn’t wait for the due invoices to pile up—I recommend sending reminders before the invoice due date. That way you’re ahead of the game. Not all customers are equal, and you should know the best tactics for handling late invoices.
Asking for payment sometimes can make you feel uncomfortable, so make it as easy on yourself as possible. Below is a sequence of five emails (you can also adapt them for phone calls) you can prepare to send when requesting payments for overdue invoices.
Send it: Week before the due date
Email subject: Follow-up on invoice #10237
Hi, John Doe,
Hope everything is going well.
Just wanted to get in touch with you to see if everything is clear with the invoice #10237 we sent on March 25th 2017.
I am sure you’re quite busy, but I would appreciate if you could take a moment and look at the invoice when you get a chance. Please address any questions you may have.
The first reminder should be short, friendly, and informative. Don’t bother the customer with too much info, and don’t request payment straight away as the invoice is not due yet. With this email, the customer should get a sense of your organized personality and recognize that you regularly track your invoices.
Send it: On the due date
Email subject: Invoice #10237 is due today
Just wanted to remind you about the invoice #10237 (total $5,400) we emailed you on March 25th 2017 that is due today.
You can make payment to the bank account specified on the invoice.
If you have any questions whatsoever, please reply and I’d be happy to clarify them.
This is one of the most important email in the sequence, with a call to action for making a payment. It should be short and straight to the point.
Send it: Week after the due date
Email subject: The invoice #10237 is week overdue
Hi, John Doe,
Our records tell us we haven’t received payment of $5,400 for invoice #10237, which is overdue by one week now. Probably you’re busy and have overlooked it.
I would appreciate if you could check this out on your end.
If the payment has already been sent, please disregard this notice. And if you can’t find the invoice for some reason, I’ll be pleased to send you a copy of it.
This is the first email addressing that the invoice is overdue, but it should still keep the calm and friendly tone. Include details about the invoice like number, amount due, due timeframe, etc. Offer a copy of the invoice as sometimes they do get lost or accidentally deleted.
Send it: Month after the due date
Email subject: 4th reminder on invoice #10237 (overdue by month)
I wrote to you several times, reminding you of the pending amount of $5,400 for invoice #10237, but it seems to remain unpaid even after a whole month.
If you have any queries regarding its payment or if I can help you in any way, please let me know. If not, please organize for settlement of this invoice immediately.
Could you reply to this message and let me know you received it?
The email message above uses a more direct tone. It is colder than the previous ones but without harsh language. In this email, you should clearly ask for the payment, and even ask the client to confirm whether they have received the message.
Send it: Two months after the due date
Email subject: Invoice #10237 not yet paid, I’m really disappointed
Just a quick note to say that I’m really disappointed that you still haven’t paid me the $5,400 for the job I did for you.
I’ve always been there to fix any problems you might have. I love working with you, but if I can’t count on you paying promptly or it takes several attempts and reminders to get my money, that’s not a good sign.
I’m not saying that I don’t want to work with you, but if I don’t receive what you owe me within the next few days, I will have to rethink doing business with you again.
This email uses somewhat harsh and personal language, but you shouldn’t feel uncomfortable for addressing the payment issue in this manner. The most important thing is you should always be honest with your clients—they are just humans after all, so things sometimes don’t be as smoothly as planned.
But what if someone doesn’t pay after all these email follow-ups? Well, you can try calling them on the phone or contact key people in the company, like the founder or the CEO. And if that doesn’t work, you should settle the payment through a collection agency.
Follow the sequence above and you’ll notice your overdue invoice pile going down. You can implement this email sequence in your business process when doing your invoice paperwork. Or even add them in your accounting or invoicing software if it supports auto reminder sequences. And lastly, have a successful payments collection.