Late paying clients are unfortunately a fact of business life, but there are ways of chasing your overdue money politely and effectively. Don’t forget it’s YOUR money, you have supplied goods or services that you haven’t yet been paid for, so don’t be afraid to pursue the matter as far as necessary even including through the courts.
There are several stages to go through when a customer fails to pay their invoices within the agreed timescale.
Very often the non-payment is an oversight and if this is the case you don’t want to offend a valued, normally well paying customer. The following steps are a timetable that you can follow that will take you through the stages of obtaining payment, from gentle reminder to the threat of legal action.
This is the best practice timetable of steps to obtain payment from overdue accounts.
- Send an end of the month statement of account – this will show the outstanding balance
- Around 10 days later send a second end of month statement of account and add a polite but firm note about the outstanding amount
- Send a letter about the outstanding amount in a formal manner
- Send a second letter reminding the customer of the outstanding amount
- Send a third reminder letter informing them that without payment, legal action will be taken to recover the balance
- A final letter informing them that legal action WILL be taken unless payment is received within a specified time.
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