Suffering from past due invoices? Well, you are not the only business undergoing this trauma. Chasing late payments can be cumbersome but it is inevitable task. Let’s figure out how you can rack up your revenue.
Probably, no business in this world has ever escaped from late payments. In fact, most of the businesses believe that possibly 20% of the invoices will get paid after due date while the reality is, it does happen. Invoice 30 days past due is a common scenario. Even after 30 days, most businesses deem they will get paid but sometimes the situation goes downhill and becomes 90 days past due, 4 months, 6 months and finally forgotten invoice. It is really dreadful and annoying when you don’t get paid for your hard work. More time passes, more difficult to get paid. Hence, it is wise to strategize before it’s too late. Start executing your plan of action, following 30 days past due.
One of the essential factors you need to remember before invoicing your client is to clearly mention the PAYMENT DUE DETAILS without fail. Clearly specify payment is due and payable on Net 15, Net 30 or within 15 days (from invoice date), whatever is your business payment terms.
Tip: It’s better to use the word ‘days’ over ‘net’ as it is easy for the clients to understand who are less experienced in business.
If you caught any client with late payment, follow the simple strategies and ensure to get paid (if not on time, at least late).
Invoice with 30 days past due:
Initially, it is advisable to ask the client with good faith to make the payment. Be polite and let them know that you will be of their assistance in future and also thankful if they respond and make payment within next 10 days.
Email your client, professionally:
If it is your initial reminder, make a point to be polite and to the point. Make sure the email is precise and understandable. Creating template or automated process will do no good as each client business is different and payment due may be also different. So it’s better to compose mail, yourself.
- Use your work email id to mail your past due payment clients
- Mention your business name
- If you have contacted the client before, regarding payment, include previous communication details in the mail
- Include your invoice
- Use polite language (even if your frustration level has reached to the peak)
- Keep a track of your email conversation for further use
- Call your client to notify them about the mail
Communicate via call:
Calling can be a challenging task for you, as there are chances of bursting out your anger and worsening the situation. Hence we advise you to have a scripted and rehearsed call.
How to make your phone call gainful?
- Don’t directly start with the late payment issue. Be polite, start with general greetings and then talk something that denotes your business relationship, how important your client is for your business and finally break the ice
- Explain how essential it is to maintain cash flow for managing and expanding your business
- Start discussing the invoice in detail – invoice date, invoice number, invoice description, due date, how many days passed from payment due
- Explain your payment policies
- Convince your clients and take a specific date on which they will make payment. Also ask them give it in writing (probably email message), so that you will have a proof
Prepare a script before conversation, so that you can talk confidently and convincingly.
Late payment fees / Interest rate:
Warning or threatening your clients usually works. Charging late payment fees is a good trick to get paid. The interest rate on invoice compels the client to pay on time as nobody is interested in paying interest. Remember to include the late payment charges / interest rate in the initial bill itself so that the client understands the consequence of late payment.
It is infeasible to manually keep record of pending invoices, hence helpful invoicing softwares like Billbooks will assist you to keep a track of paid, unpaid and partially paid invoices, according to which you can analyze, streamline the process and follow the line of attack.