When you have an unpaid invoice, it can be difficult to know how to handle it especially if you are a small or micro business. Profitable business relationships are built on personal relationships so it can feel tricky to pursue what is owed without damaging the relationship.
But business is business and you are doing nothing wrong in expecting prompt payment from your customers and by chasing your money if they fail to pay as agreed. So what is the process for chasing up an unpaid invoice?
Unpaid Invoice Recovery 101
Chasing invoices isn't ideal, but it is something most business owners have to do regularly in order to maintain a healthy cashflow. Many business owners feel uncomfortable with chasing up unpaid invoices but it is important to remember that this is your money and it belongs in your bank account; and as with many business tasks provided it is approached in a clear and professional manner it will only help to reinforce your professionalism with your customers.
So what are the steps to chasing an unpaid or overdue invoice?
Pick up the phone
In a majority of cases of late or non-payment the problem tends to be with administration, emails get deleted, invoices get lost and people forget to make payment when promised. It happens in every business and is usually easily solved by making a quick call.
Keep it light and professional in tone and remind your customer that the unpaid invoices in question are now past due and that you would appreciate payment as soon as possible. If your client has genuinely made an error this call will be all that is needed to flag it with them and secure payment. If at all possible try to secure a date when payment will be made and confirm the client has everything they need from you to process payment without further delay.
If your customer has a legitimate query or question regarding the invoice act quickly to resolve it (and keep records of the resolution) in order to remove any semi-legitimate reason for late payment. Once the query is resolved satisfactorily call again and confirm when payment will be made.
As stated in a majority of cases of late payment of unpaid invoices this will be all you need to get paid. But if that doesn't work you will need to look at a more formal approach to recovery, starting with our free late payment letter templates. You can get more information on this subject in part seven of the Managing Cashflow Guides from the BIS & ICM here.
Over 150 Years Of Industry Experience
Our modest but highly skilled team has a combined total of over 150 years of experience in commercial credit management and B2B debt collection. From independent IT contractors to major film and TV publishers, Safe Collections has the knowledge and experience you need to get paid quickly and cost effectively.