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How to Get Overdue Invoices Paid: Tips for Small Business Owners

We all have clients who are a joy to work with. They are responsive and sunny while we do the work. But they go quiet when it comes to paying their invoices. For small businesses, overdue invoices can be a big problem for cash flow. You deserve payment for the time and effort you have put into completing work; we don’t work for free. 

What strategies can you use for slow-paying clients to maintain good relations? 

Making credit control easy isn’t as overwhelming as it may appear at first. Here’s a few overdue invoice payment tips to help you get paid!

Set Up Auto Reminders for Overdue Invoices

If you use accounting software, you can set up auto reminders. The team will send them to the client until the client pays the invoice. These can go out at regular intervals, allowing you to avoid constant thought about it. Usually, a few reminders will be enough for the invoice to get paid.

Most late payments aren’t malicious. They result from forgetfulness. A gentle reminder can be all it takes. 

Using auto reminders requires you to be up to date with bookkeeping. Otherwise, it will send payment reminders to people who have already paid. This is an effective way to annoy people. 

If you do not use software, then you can set diary reminders to chase payments after a set period of time. 

Send a Polite but Stern Email

If the auto reminders do not work, send a polite but firm email to the client. Outline the amount they owe, attach the invoices, and ask for payment as soon as possible. This may prompt questions about the invoices. But you should receive a response, even if the payment does not arrive. You can also say that if you don’t get paid, you will add interest and late fees to the amount owed. 

I usually give the benefit of the doubt in these emails. I write, “If you’ve already paid, I apologise for missing this. Please confirm the payment date and the bank details.”

Nine out of ten people will go to find proof of payment, realise something went wrong, and rush to pay you.  

overdue invoices

Get Someone Else to Follow up Overdue Invoices

Sometimes getting someone else to chase up the invoice can work wonders. If a client ignores your emails, get someone else to follow up on the debt or use a different email. This can help if you want to keep working with the client or fear damage to your reputation. Someone else can be firmer than you are able to be, given your history with the client. 

An email from an accountant can scare people into paying. It feels more formal and important.  If you don’t have a bookkeeper or an accountant, you should probably talk to us!

Add Interest and Late Fees

If all else fails then a brilliant late payment solution for small businesses is to add interest and late fees to the unpaid amount. 

There is a clever online calculator for that, so you do not need to do the maths of the amount to add.

https://dontpaylate.uk/

Consider Debt Collection as a Last Resort

Even with all your small business credit control strategies in place, some clients just won’t pay. The final step would be to get in the debt collectors. By this point it is likely the non-payer is no longer a client so you can go hard on trying to get paid your money. If they are a client, you must review why you are working for someone who is not paying you. 

Why Credit Control is Essential for Small Businesses

We see it often. People work for clients, hoping for more work or because they are their biggest clients. They never get paid. Never work for free, regardless of the promises made. Value yourself and your time!  

It’s essential to track your unpaid invoices. So, make credit control a non-negotiable job every fortnight. This will prevent debts from spiralling out of control.

Chasing people for money doesn’t need to be a huge, icky task if you get comfortable with it and follow these steps. And if you still hate it, get in contact to see how we can help you with it.  

Need help with managing late payments and improving your credit control? Contact us at 2 Sisters Accounting to see how we can support your business.

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