Send Reminders, Track Dates: Learn To Collect Unpaid Invoices
A Guide To Getting Clients To Settle Unpaid Invoices
One of the biggest problems that any business or freelancer can face is maintaining a steady stream of cash. You need invoices to get paid so you can handle your personal finances and pay for business costs. But how can you do that when you’re constantly running after your clients for payments?
Keep reading to learn our handy tips for dealing with late payments, so you can focus on getting work instead of running after overdue invoices!
Put Little Motivators In Your Contracts And Invoices
Nothing deters a customer from late payments quite like a penalty fee! If you find that you’re having problems getting your clients to pay on time, it may be necessary to implement a new penalty policy. Start inserting clauses into your contracts which state that if you are not repaid within a specified period, there will be a penalty for every day that it goes unpaid.
This can be as simple as a lump sum for every X number of days it has gone unpaid, or a percentage of the total amount due. Ensure that the penalty fee isn’t too hefty. Late fees are not meant to be a new source of income, just a motivator for clients to avoid paying late.
Another thing you can do is provide discounts for early payments. Providing this option means that you will have a ready supply of cash if customers decide to pay ahead, and clients will love it because they get a sweet discount.
Make Sure You Remind Clients Ahead Of The Due Date
Most of the time, your customers aren’t willfully trying to avoid paying you on the due date. We’re all pretty busy, and it’s easy to lose track of payment deadlines when you’re handling other financial or business concerns. One good way to avoid this is to keep a solid invoice tracking system, so you know which ones are due on which days.
Once you know when a client’s invoice is due, remember to mark a date at least a week before. That’s the day when you can call them to remind them that payment needs to be made on a specific date. If you’re a little anxious about picking up the phone, sending off an email is fine—just make sure they receive it!
Sending a reminder ahead of time lets them plan the due amount in their budget, and it’s also a way to ensure that you’re prioritized over other pending dues where no one’s given them a heads-up. Just make sure to keep yourself organised when it comes to follow ups! Don’t rely on your invoices alone to let you know that something is due. Keep a calendar where you can always check on it, and mark the dates so you don’t even have to dig up the invoice every time you need to send a late reminder. It’ll also help you plan ahead in case you need to move payment periods for a client with financial problems.
If Your Client Is Already Late, A Little Understanding Goes A Long Way
If the invoice is already overdue, it wouldn’t hurt to call them up or email and remind them that it’s late. Some customers suddenly face financial emergencies, like a loved one’s hospital bills or a due mortgage. In that case, it’s advisable that you reconsider being too strict about the deadline.
When you’re running a small business or working as a freelancer, your professional reputation is everything. People will appreciate your consideration and understanding, and will become more likely to rehire you or recommend you to other people. Giving your work a more personal and caring touch will set you apart from other businesses.
Organize Your Invoice Tracking And Collecting System
Sometimes, it’s not even the client who’s the problem. Maybe you haven’t quite worked out how to properly sort your invoices, or you’ve lost vital contact details which should have allowed you to reach customers for payment. In that case, it’s time for you to take a good, hard look at your recordkeeping system. Going with a full-on paper system is fine, but it can make it easy for you to lose documents or misfile them.
Examine your invoices and how you store and collect them. Make sure that all contact details, names, terms, and due dates are clearly printed on the invoice. Look at the invoice and see if there are terms which don’t match the one on your contract. If you have typos or you’re missing details, you need to start practicing a double-check so it doesn’t happen again.
Ensuring that you have unique and correct invoice numbers will also keep you from forgetting about pending payments, and it will be a good way to see right off the bat who owes you what amount. If you don’t have time to redo your invoice templates from scratch or you’re worried about having enough space for all your records, you should consider going digital. There are programs or sites you can use to create invoices and help you track your finances, which will save you a lot of time in the long run!
Always Make Sure That You’re Asking In A Polite And Professional Manner
Even if your clients are really late in paying you back, that’s not a good reason to lose your cool and talk to them in a rude manner. Remember that we’re all human, and treating a customer disrespectfully doesn’t do anything to motivate them to pay you on time. It may also cause them to give you bad reviews or discourage potential clients from hiring you, because they can cite how poorly you treated them when collecting due invoices.
If you’re worried that you’ll get snippy over the phone, draw up an email instead before you take a deep breath and call them. Sometimes it really just takes that additional email to nudge them towards handling that due invoice.
Keep Track Of Your Invoices With The Right Tools
If late invoices are stressing you out, you might need a bit of professional help. That’s where the Free Invoice Generator comes in! It comes with a ton of great features that help keep everything organised and under control: the free template generator means that you won’t miss a single vital detail in your invoices, and if you’re away from the office the app lets you track your finances on the go.
The best part of our software is that there is a feature which automatically sends invoices to clients as soon as you’re done making them. It also sends reminders immediately to customers before the due date, and allows for easy collection through approved payment methods. It’s basically like having your own personal accountant!