Nothing is better than clients who pay their invoices on-time. Some clients will ghost you and you won’t know what to do. This can happen to anyone regardless of their experience or if they are new to the business. We hope that you don’t become one of those business owners who learn to collect money the hard and expensive way. If that is the case, you can learn from your mistakes and be ready for when another similar situation arises. We have been hit by the economic slowdown in the last few months. People are facing cash shortages, so it is better to be safe than sorry. We have compiled a brief guide to help you follow up on clients who don’t pay. How to follow-up on past due invoices
You can speed up the payment process by having a discussion about the invoice issue from the beginning. Don’t worry if it’s too late. There’s always the next one. First, think about who should receive the invoice. Sometimes it is the client, sometimes the accounting department, or both. Next, consider the payment options such as bank transfer, eCheck or credit card to ensure there is no holdup. Do you know that clients are more likely pay their invoices on time if everything is clear? This is why it is important to include all necessary information. Last but not the least, worrying about past due payments can be a source of anxiety. You can use accounting software to track late payments more easily. Avoid clients overdue payments
Review new customers. It is important to assess the creditworthiness and set a limit for new clients. This will reduce the chance of late payments and debt. In these cases, we recommend that you start with the lowest limit. Send invoices immediately. Customers won’t be able to pay you if they don’t receive their invoice. Send invoices promptly. Online invoicing will speed up the process as paper invoices can be lost or taken too long to process. Create transparent invoices. Payouts will be faster if there is no delay. Offer discounts for early payments Customers will pay their bills on-time if they are offered incentives. For every early payment, you can reward them by offering a discount. Collecting overdue payments
We have some suggestions for you if you don’t get paid for your job. Don’t get upset. It is important to be paid. Some customers will always find an excuse. Be friendly, but professional. Clients will be adamant that you are not taking a firm stance. If you’re not a skilled negotiator and delegator in your company, who is? Pay attention to payments. Many business owners allow late-paying customers to slip because they avoid confrontation or are too busy tracking everything. To chase down late payments, use accounting software. Send reminder letters. Let your customers know that late payments can be addressed by letters. A standard form letter should be prepared that you can use in different situations. End the letter by inviting clients to contact you to discuss missed payments. You can take legal action. If there is no alternative or if you don’t get the desired results from the previous steps, it’s time for legal action. Your lawyers should contact you and send a demand letter to threaten the clients with legal action if they don’t settle the debt. Invoicing customers and collecting payment. You must issue an invoice if you sell a product or service. You have two options: ask for payment immediately or allow them to pay the invoice later. There are some technicalities that you need to include. For example,
