When it's your job to collect past-due invoices, what you say matters. And what you say will depend on your state of mind when you type the email or get on the phone. How you come across to your clients, especially when they're long-term business-to-business relationships, will determine how they react to you, your demands, or any negotiation tactics. It's important that you're well-prepared.
Here's what to say when collecting past-due invoices.
We May Be Wrong But...
Start off the conversation in a positive way, giving your client the benefit of the doubt. It could be as simple a statement as, "If you've previously paid this invoice, please disregard this reminder."
The client may choose to respond in such a way as, "Yes, we've already paid," Or "No, actually, we did have some questions." Or even, "I actually didn't receive any invoice from you."
By starting off in this way, the client doesn't feel accused and may clear up any reason that they didn't pay their invoices on time.
How Can We Help?
This prompt shows your client that you really do care to maintain your working relationship. Maybe they need to negotiate longer payment terms, or they're confused about the wording in the contract, agreement, or invoice. By offering to help, clients understand that you're willing to work together to get the account brought current or to clear up any confusion.
Let's Work Together to Make Payment Arrangements
As a business that works with or partners with other businesses, your B2B client relationships are important. A past-due invoice shouldn't damage that hard-won partnership, especially if it can be resolved quickly and easily. A "let's work together" approach conveys the willingness to resolve the challenges so that you can still work together productively.
Invoice Collections Essentials
When collecting past-due invoices, you must also honor your business needs and cash flow. Before contacting the client, make sure to cover your tracks:
- Were the payment terms clear?
- Did the client sign the contract and/or agree to the price and terms?
- Was there correspondence stating that they wouldn't pay on time?
- Is this the first time the client has paid late or are they serially delinquent offenders?
- Does the invoice include all of the required items for the client to know how to pay and when?
If the client is unwilling or unable to work with you to pay the past due invoice, the next step is to inform them that their account will be sent to a professional collections agency. Here's our recent post on how to choose an agency to help with bad debt.
The bottom line is to collect with kindness unless your client is absolutely not going to pay their past-due invoices. After that, work with a collections agency that still honors your client and your working relationships.
