How to chase an unpaid invoice

posted by 3 years ago in Features

Cashflow is the lifeblood of business, yet Sage found that a staggering 40% of SMEs are directly and negatively affected by late payments — with impacts ranging from having to reduce spend on future investments to cutting staff salaries and bonuses.

Add to that the effort that goes into chasing payments, sometimes taking up as much as twenty days a year that could be spent running your business. Even when you make the payment process as easy as you possibly can, there’s always that one client who doesn’t stick to the agreed invoicing terms.

While this can be very frustrating, bear in mind that your customer may be struggling with their own cash flow issues. So, before you start sending payment demands or start considering financing, take a bit of time to make sure you fully understand the situation.

Before you chase payments, check that all the information on your invoice is correct to avoid disputes and further delays, including:

  • invoice date and amount
  • your customer’s details
  • your payment/bank details

It’s also a good idea to make a note of who you’ve spoken to and what has been said to date, before you send payment reminders.

To recover an unpaid invoice, if your invoice is correct and you need to chase the client:

  • ensure you’re talking to the right person
  • after two days, ask if they received the original invoice and attach a copy
  • send a friendly reminder after another seven days have passed
  • make a phone call 24 hours after your second nudge and ask if they received your emails

For more information, have a look at Sage’s guide to following up on unpaid invoices while maintaining positive client relationships.