Chasing down debts owed makes for an interesting film plot, but it’s rarely entertaining in real life. Trying to collect on an overdue invoice is more likely to inspire stress and anxiety than kicked-in doors or epic explosion scenes. You’ll also want to ask for payment while leaving the door open for a continued working relationship. Finding that delicate balance between firm and respectful can be a challenge for even the most tactful negotiators.
Chasing down debts owed makes for an interesting film plot, but it’s rarely entertaining in real life. Trying to collect on an overdue invoice is more likely to inspire stress and anxiety than kicked-in doors or epic explosion scenes. You’ll also want to ask for payment while leaving the door open for a continued working relationship. Finding that delicate balance between firm and respectful can be a challenge for even the most tactful negotiators.
Fortunately, you have options. From taking a step back and managing your tone to concrete invoice tracking tools, here’s how to ask for an overdue invoice without hurting your business relationship:
- Before You Write a Word, Practice Empathy
If you’re worried about affecting your business relationship, this first step is vital. Don’t start by drafting an email or rehearsing what you’ll say over the phone. Take a moment to consider the situation from your client’s perspective. They’re only human. Unless this person has a history of late payments – in which case, maybe you don’t want to maintain a business relationship with them – assume the best. It’s easy to lose track of time, get too busy, or make a simple error. Avoid going in hot by keeping an open mind about the reason for their overdue invoice.
- Check Your Tone
In most cases, you’ll send a follow-up email. If this is the case, draft your email and let it sit for an hour. If possible, ask a colleague to read over it and offer feedback. Your tone should always remain respectful, but firm. Feel free to use language that is transparent about your tone, such as “This is a friendly reminder” or “I’d appreciate it if…” No matter what the channel, keep the content of your communications non-confrontational and limited to facts.
- Send a Preventative Notice (or Two)
In many cases, you can avoid the need to chase an overdue payment by sending early reminders. Consider sending a reminder email one week before payment is due, ensuring that your client is on track to make the payment on time. This is the perfect time to confirm that they have received your invoice and there is no confusion about payment terms.
Next, send a reminder on the day that payment is due. In this email, it’s important to keep a light tone, especially since the payment still isn’t late. You can also include something along the lines of “If you have already sent payment, please disregard this email” to convey trust in the client.
- Send Late Fee Warnings
Often the threat of a late fee is enough to push a client to take action. In later emails, remind your recipient of your late fee interest rates and when they’ll begin accruing. If you still haven’t received payment the day before late fees go into effect, give them one more notice. Warning a client of late fees can feel intimidating, but the purpose of these emails is to help them avoid fees.
- Automate Invoice Reminders
If navigating tone and figuring out how many times to send a notice sounds frustrating, you still have another option: automation. Software like Invoice Tracker lets you set up a series of emails that will automatically go out to clients before and after their invoices are due. Choose the tone, urgency, and frequency of emails for each client as needed.
A significant benefit of using automated reminders, in addition to avoiding those awkward exchanges, is integration. You can sync an invoice tracker with time trackers, your billing account, and even accounting systems like QuickBooks and Xero. Collecting late payments doesn’t have to be a stressful event. Go it alone with these tips or look into automation options so you can focus on what you do best. For more information on invoice tracking and automation, contact us today or try out Invoice Tracker free for 30-days.
