Unpaid Invoice? Here’s What To Say to Your Customer
An unpaid invoice is a serious problem for businesses, cutting into profits and eating up employee time that could be better spent on professionally productive activities. Unfortunately, they have to be dealt with, and that means chasing down clients who haven’t paid, sometimes for weeks on end.
Such a problem begs the question: how can you manage this problem efficiently so that you can get these invoices paid and move on with business as usual?
Most often, the solution comes down to strategic communication.
Unpaid Invoice: Double Check Your Work
When dealing with clients who fail to pay, freelancers and businesses alike should always start out by making sure that it’s really the client who’s in the wrong.
Check everything from the initial communication and contract to the final submission. Make sure you’ve completed everything, that it was submitted by the date expected. Next, make sure that you are billing for the amount agreed on. One of the biggest reasons people don’t get paid is the wrong billing amount on the invoice.
If anything is missing or the payment amount wasn’t set in advance, you’ll have a harder time getting paid. In fact, your client may think they don’t need to pay you at all. Don’t make this mistake; create a contract from the start and stick to it.
Unpaid Invoice: Start At The Bottom
Once you’ve reviewed all aspects of the job, follow-up on the invoice in a minimally personal way. Typically, it’s best to start with email, since that’s how most business communication takes place these days. And when you send that, assume your client fully intends to pay you.
Creating additional hostility won’t help you clear this invoice. You want to establish a firm but friendly rapport that will result in resolution, not bitterness.
In your email, describe the situation and ask if there’s something further that needs to be worked out in order to get the client to pay you. Just as unresolved invoices can cause cash flow problems on your end, they may be facing similar issues.
Helping them set up a payment plan, for example, may demonstrate your good faith in your client and also resolve the bill in a more timely manner.
If you haven’t heard back from your client after contacting them via email, or they reply but fail to set any terms with you, then you should become more aggressive in your follow-up. When email is easily ignored, you should begin calling your client.
Phone calls tend to be more confrontational, but also more delicate. You may not have written records of the call or a recording, making them harder to enforce. You also need to be very careful that you have the right person on the phone. If you’re going to disclose any sensitive professional or financial information make sure you’re talking to the right person. Failure to do so can potentially result in legal ramifications.
In addition to double-checking who you’re speaking with, if your company uses an automated calling system that fills in customer information, it’s important to use an answering machine detection program that will exclude private information from any messages.
In some scenarios, anyone with physical access can listen to an answering machine or voice mail message. Even if they aren’t authorized to access information about this business arrangement, they will know.
Unpaid Invoice: Level Up
Finally, if you’re not receiving any response from a non-paying client, you have a few remaining options.
If your client is part of a larger company that you’re doing work for, you can go over their head and contact a supervisor or accounts manager. As this person has higher clearance and responsibility to carry out contacts, you’ll likely have more success making an appeal.
If your client is a freelancer or you can’t reach a higher-ranking individual at their company. This may result in you having to take the case to court. Though this may seem extreme on small accounts, it can be worth the effort to resolve.
The case and demonstrate to future clients that you’re not going to be cheated out of fair payment. In many cases, just the mention of legal action will be enough to open up lines of communication. I find this typically helps you resolve a long overdue invoices.
No one enjoys dealing with unpaid invoices – not you and not your clients who haven’t paid them – so focus on instituting systems that simplify payment from the start. This may mean collecting payment information when you accept a client, even if you won’t bill them till work is completed. This may mean using payment management software to make the process less stressful.
You’ve got a lot more you could be doing with your time other than chasing down unpaid invoices.