How To Recover a Past Due Invoice Professionally?

Everyone loves to get paid as soon as they complete their given jobs. Chasing clients around for pay can be a tad burdensome, frustrating and eats up a valuable chunk of your time. As ugly as this can be, it is sometimes inevitable. Hence, it is important to fashion out effective methods of fast-tracking payment procedures. Thankfully, your clients can be encouraged to pay faster by sending them a Late Payment Letter. Here are a few solid tips to help you in crafting the perfect overdue invoice letter that will get you paid.

Below, we’ll cover:

  • Learn to Follow up at the Right Time
  • Mind Your Choice of Words
  • Ensure You Include All Invoice and Payment Information
  • State Clearly the Consequences of an Overdue Payment
  • Provide a Payment Plan
  • Accept The Return of Products
  • Send Automated Reminders
  • Make a Phone Call and a Physical Visit if Possible
  • Issue a Letter From Your Attorney
  • Sue in Small Claims Court

Everyone loves to get paid as soon as they complete their given jobs. Chasing clients around for pay can be a tad burdensome, frustrating and eats up a valuable chunk of your time. As ugly as this can be, it is sometimes inevitable. Hence, it is important to fashion out effective methods of fast-tracking payment procedures. Thankfully, your clients can be encouraged to pay faster by sending them a Late Payment Letter. Here are a few solid tips to help you in crafting the perfect overdue invoice letter that will get you paid.

Learn to Follow up at the Right Time

Your client may be one who regularly pays late. It is imperative to follow up immediately after your invoice is due. Many clients can’t keep track of when they are to make payments because of their hectic work schedules. The onus therefore lies on you to remind them. You would be shooting yourself in the foot if you just let it slide and not follow up with the overdue invoice.

You can try sending the overdue payment letter on a weekend when your client is less busy and has ample time to go through your letter. To get results, you must never neglect the time factor!

Mind Your Choice of Words

Things can get heated up and frustrating when you are being owed, especially after a very long period. Still, you need to be polite and professional in your approach when drafting a strong letter for outstanding payment.

For instance, if your invoice is about two weeks due, you need to be friendly and courteous in reminding the client of their debt because you don’t want your relationship with your client to turn sour. When it’s about two months due, you need to be professional and firm and prove the urgency to pay the invoice. Overdue invoices of about three months and more should be turned over to a collection agency.

Ensure You Include All Invoice and Payment Information

Including all contractual agreements and payment details in your late payment letters makes it easier for your client to know the particular invoice they need to attend to and how best to make the payments. Your payment reminder letter should contain the following:

  • Invoice reference number and date.
  • Amount owed.
  • Payment terms and conditions, such as late payment penalties.
  • A reminder of past due invoice letter(s).
  • Payment instructions.
  • Your contact details.

State Clearly the Consequences of an Overdue Payment

First off, including a late fee policy in any of your deals and invoices proves you are an expert who knows what you are doing. Interestingly, many clients are not jolted into action until they realize the consequences of paying late.

You need to explicitly remind your client of the consequences of paying late, which may come in form of a late payment charge or otherwise. This will push your clients into taking you more seriously and paying up any outstanding amounts.

Provide a Payment Plan

There are a host of things that could make your invoice a past due invoice. The client company or individual you are working with might have experienced some heavy financial losses that may have incapactiated them from making payments at the right time.

However, you can increase the likelihood of getting paid when you draft a payment plan in your overdue payment letter. You can divide the invoice into smaller payable amounts that won’t faze your clients. With this payment plan, it may take a longer time to recover the total amount owed, but you definitely will.. When unforeseen situations like this arise, providing a payment plan is your best bet.

Accept The Return of Products

Although the primary purpose of doing business is to make profits, a break-even isn’t so bad. In the event that your business deals with physical products, you can arrange to have your products returned if your client(s) still have them. This decision will bring no profits to your pocket, but it will definitely not lead to a loss.

Arranging for your products' return after an overdue invoice can spur your clients into paying quickly for the products you delivered to them. Until you take this bold step, you might need to wait longer than you can bear before getting paid.

Send Automated Reminders

There are invoicing tools and software that come with the automated reminder feature. Using this feature, you can manually set the time you want your past due notice to be sent. Say after one day, 15 days, 30 days, two months, etc. Whatever you want as a personal note for your clients can also be included in each of these reminders.

This way, you would worry less about marking updates on your calendar and sending e-mails to the client. Invoicing software can also include late payments to the payment sum automatically, as long as you’ve already negotiated a late fee agreement with your client.

Make a Phone Call and a Physical Visit if Possible

While drafting a past due invoice letter, it is vital to bear in mind that your clients might not get to receive it as early as possible or might not treat it as urgently as you want. Making a direct phone call to their office and telling them about an overdue payment is likely to put them on their toes.

The truth is, for one reason or another, the client may never get to read your past due balance letter or e-mails. Making a phone call and, if possible, paying them a visit helps them realize that you mean business.

Issue a Letter From Your Attorney

Some clients and companies never behave until you get law and government agencies to intervene in your delinquent invoice issue. You might need assistance from an attorney when your past due invoice letter is rebuffed.

Basically, this letter has your attorney’s official letterhead and warns against repercussions that may arise if payments are not made at once.

Sue in Small Claims Court

Some clients usually take undue advantage of debts that are not that high. They feel they are less important, forgetting that “a debt is a debt" no matter how big or small it might be viewed.

If your owed amount is not huge, it is quite cheap to sue a client in a small claims court. Instead of filing it with the judge, it could be enough to literally fill out the small claims court complaint form and submit a copy to the client. This might trigger your clients to take your late payment letter seriously.

Some clients are very tough to deal with when it comes to honoring an invoice deadline. However, these aforementioned tips will help you recover a past due invoice professionally.

Moreover, our website has many templates for various types of invoices, and we have amazing invoice generators. So, if you are considering generating an invoice for your business, we’ve got you covered.