Many businesses are excellent at doing the work and oddly shy about collecting the money.
It feels awkward. You have built a good relationship, delivered something useful, and now you must send an email that begins, “Just following up on invoice 1042.” It seems faintly rude, like asking for the bill while the guests are still finishing their wine.
But an unpaid invoice is not a favour. It is a loan, and you did not agree to the terms.
Slow payment is one of the quietest ways to damage a growing business. Sales look healthy and profit looks respectable, yet the bank balance keeps sulking. You pay wages and suppliers on time while your clients take their own sweet time, and you end up financing their business with your cash.
The good news is that most late payment is not malicious. Invoices go to the wrong person. Purchase orders are missing. Somebody is on holiday. The client’s accounts team did not know the work was complete. It is rarely a conspiracy. It is usually a process.
So start before the invoice.
Agree payment terms at the beginning, in writing, and make them clear. If you need a deposit, ask for it. If the project is large, bill in stages rather than waiting until the end. Few things improve cash flow as reliably as sending an invoice sooner.
Then make the invoice easy to pay. Send it to the right person. Include the purchase order number if they need one. Show the due date clearly, along with simple payment details. If your invoice requires detective work, it will sit in somebody’s pile until they have a quiet afternoon, which in most organisations means never.
Send it promptly, too. Invoicing every second Friday because that is when somebody gets to it is not a policy. It is a delay with a calendar.
Next, follow up properly. A friendly reminder a few days before the due date works well, followed by another the day after if nothing arrives. Keep the tone polite and matter-of-fact. You are not accusing anybody of anything. You are checking that the invoice has found its way home.
If a client regularly pays late, treat that as information. Perhaps their terms need to be shorter. Perhaps they need a deposit or card-on-file arrangement. Perhaps they are simply not a good client, which is useful to know before you take on more of their work.
It also helps to watch the numbers. How many days does it typically take for customers to pay? Which invoices are overdue by more than thirty days? Which clients make up most of that total? A simple aged debtors report, reviewed weekly, can save a surprising amount of stress.
None of this makes you less likeable. Good clients tend to respect businesses that run tidily.
You deliver value, and you are entitled to be paid for it.
Politely, promptly and on time.
Photo by Towfiqu barbhuiya on Unsplash