Clients forget will forget to pay
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Clients don’t always pay invoices on time. (Shocking, I know!) But, that doesn’t necessarily mean they’re trying to stiff you. Oftentimes, they just got busy, with either their business or personal life, and forgot about your invoice. That’s where follow up comes in.
Following up on your invoices will always get them paid faster than just hoping your client remembers. And, it’s an important part of your Accounts Receiveable process. But, following up on an invoice is easier said than done and you may need to approach it slightly differently depending on the total invoice amount, the invoice due date, and your industry. Here are some basic rules to get you started.
Give them the benefit of the doubt and be professional: Chances are they just forgot about your invoice. Don’t come out of the gate hot. Your goal is to just politely remind them about the invoice.
Plan your follow up: You shouldn’t be reinventing the wheel every time you do invoice follow up. Create a plan that works for your business and stick to it. For invoices under $1,000 with an original term of less than 7 days, an automated follow up email on day 5 (or the due date) plus a phone call once payment is late will work wonders. As your total invoice amount increases, consider adding more personalized follow ups (pick up the phone for those $10,000+ invoices). As your payment term increases, add an automated weekly reminder and, as you approach 30+ days, a phone call before the invoice is due.
Leverage your software: Most software that can send invoices can also send one or two follow up emails. Generally, their standard settings (eg email text, how long to wait, etc) are good enough, but they lack personality and can come off somewhat robotic. If you’re uber professional in your business communications, then that may be fine. But, if you’re more casual, you’ll want to go in and edit the follow up email’s text. (Don’t overthink it. It’s just a reminder.)
Consider more specialized invoicing software: If you have a lot of invoices or set your due dates 30+ days out, consider getting a more specialized software that can do more of the follow up heavylifting. Specialized softwares will give you more granular control over your follow up emails and let you send more of them.
THIS WEEK’S ACTION ITEM: Customize your invoicing (or accounting) software’s follow up emails and start using them. Every new invoice should send an automated follow up, if it hasn’t been paid.
Have a good weekend and stay safe!