Polite Ways to Check on Unpaid Invoices

unpaid invoice

Unpaid invoices aren’t only an inconvenience, irrespective of the scale of your company. You must have systems in place to ensure that invoicing does not jeopardize your company’s survival. That may come across as a little theatrical. But consider that for a second. 

Unpaid invoices affect everything, which implies that if your cash flow is disrupted, you won’t be able to maintain your business running. You wouldn’t be able to pay your employees, contractors, or vendors in this case. As a consequence, you have to charge late fees and your reputation will suffer.

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How to Collect an Unpaid Invoice?

Follow these methods to collect an unpaid invoice-

1. Check to See If You Performed the Method Correctly, and Then Follow Up Gently.

Don’t rush to conclusions and keep giving threatening or rude emails to your client. To begin, double-check that you completed the proper payment procedures. Are you sure you sent the invoice? Were the terms of payment clear? What is the amount that needs to be paid? Are you sure you sent it to the correct person? Is your address up to date?

how to collect an unpaid invoice

 It would be quite humiliating to lose your calm with a customer only to discover that it was entirely your fault.

 Please remember that unpaid invoices might sometimes sneak through the cracks. A client could be out of town or have an emergency. Send a courteous follow-up email to verify it before getting furious.

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2. Provide Discounts While Imposing a Penalty.

Customers and clients will be encouraged to pay before the due date if you give a discount for prompt payment. If the invoice is fully paid within 10 days, it’s typical to provide a 1% or 2% discount on the entire invoice value.

provide discounts

 Unfortunately, incentives do not inspire everyone. They may get encourages, though, if their invoice includes penalty charges. This will not only encourage clients to pay sooner, but it will also assist you in covering the costs of any financing troubles you may have. You don’t really want to be unable to repay your own expenses that accrued during the period when your customers were responsible for paying you.

3. Don’t Take a Stern Business Approach.

What if you completed the procedure exactly and the courteous follow-up failed? When it comes to following up with them, I’ve found that you have to be firm at times. Andy Clarke‘s suggestion appeals to me. “Abandon a rigid business style and instead compose one email, carefully crafted to convey how you feel personally,” he recommends. “At the end of the day, business is business, but individuals work with people.”

don't take a stern business approach

 Andy states that this would be his most successful debt collection email, with each and every client repaying him in under two days. This has also proven to be a really effective strategy for me. However, it has a negative impact on the connection.

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4. Make Your Expectations Known

By defining your requirements upfront, you can prevent a lot of overdue bills, missed payments, and customers who just don’t pay.

make your expectations known

 Some things to consider mentioning are:

  1. Your payment conditions. When do you anticipate receiving payment: upon completion of the work, during 7 days, 14 days?
  2. What if they refuse to pay? Do you levy a late fee or refer unpaid invoices to a bill collector?
  3. What if they cancel the project once it has started?

 Making clear procedures for these items — and asking clients to sign contracts acknowledging them – will help your cash flow tremendously.

5. Make an Appointment with a Business Reporting Bureau.

If you have a client that is consistently late, you can file a complaint with a business reporting agency and publish the complaint publicly. Because this complaint may jeopardize the client’s name and prevent them from obtaining additional credit, you can nearly expect to get reimbursed right away.

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6. In the First Place, Avoid Unpaid Invoices.

If you want to avoid the headache of overdue bills in the first place, do your homework on potential clients to ensure they’re legitimate and haven’t had any previous issues. Following that, make sure you have a contract signed, keep precise documents, and request payment in advance.

avoid unpaid invoice

Make the payment procedure as simple as possible, create recurring invoices, and focus on building great client connections. Above all, understand when to stop pursuing a late payment. Hunting down a $300 payment isn’t worth the time, effort, or money.

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Unpaid invoices are aggravating, depleting, and time-consuming to deal with. It’s difficult to think of a more disagreeable aspect of owning a company. You can’t guarantee that you’ll stay away from them forever. However, you can reduce your risk. What is the key? 

Take precautions to safeguard yourself. Protect your company by being careful about the people you deal with, setting hopes high upfront, using an agreement, and delivering your invoices on time, as I outlined at the opening of this post.

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