Once you've agreed to a contract and payment terms, the assumption is that you can send an invoice and the client will pay. Disappointment sets in when the payment due date comes and there's no payment from your client. This can be especially frustrating to your sales team, if it's a new client who seems to have reneged on the deal. You don't have to lose hope.
There are some steps you can take before the payment is due in order to get paid on time. Keep in mind that your contract terms should include payment terms as well.
Part of communicating regularly with your client includes sending payment reminders. These reminders could be sent before the invoice is due. Use this language to prompt payment before the due date:
It is vital to stay professional and courteous when attempting to prompt payment on or after the due date. Frustration or panic can begin to set in when a payment is missed because that payment may be required to pay other bills for your business. An overlooked payment may be due to forgetfulness, a lost invoice or an issue with the service or product that needs to be resolved.
Payment reminders can be sent via email or regular mail to nudge a client into paying their invoice. Collections letters can also be sent either way but must be sent as soon as payment is due, past due and not received. The earlier you can send a reminder, the more likely you can recover the amount due.
Collections letters must be detailed, including the invoice number, the amount due, the due date and contact information for resolving. You can also include agreed upon payment types such as credit card, check, ACH or any other way that you will accept payment from your client. The first collection letter is a past due notification to alert clients that they have missed a payment. If your contract includes late fees or finance charges for late payments, this information should also be included in your first collections letter.
For a sample template to use for your business, download our free past due notification letter here.
Stay calm and courteous in communications with your client when an invoice is past due. Prompt payment with friendly reminders before moving into threats or collections agencies. In most cases, as the old adage states, you can actually attract more flies with honey than vinegar.