5 Tips For Chasing Invoices Without Annoying Your Clients

5 Tips For Chasing Invoices Without Annoying Your Clients

As a small business owner, chasing invoices while not annoying your clients can be a challenge

Managing a business involves numerous tasks, and one critical aspect is ensuring a healthy cash flow. Unfortunately, chasing invoices can be a challenging task that requires finesse and tact. It's crucial to strike a balance between securing payments and maintaining positive client relationships. In this blog post, we will explore five essential tips for chasing invoices without annoying your clients.

Tip 1: Establish Clear Payment Terms from the Start

The foundation of effective invoice chasing lies in setting clear and transparent payment terms right from the beginning. When clients have a crystal-clear understanding of when payments are due, the likelihood of late payments decreases. Ensure that your invoices include explicit details such as:

Due Date: Clearly mention the due date for each invoice.

Payment Methods: Specify the accepted payment methods to avoid any confusion.

Late Payment Consequences: Outline the consequences of late payments, such as interest charges or potential service interruptions.

By establishing these terms upfront, you create a framework for a professional and straightforward business relationship. This clarity also positions you as a business that values professionalism and expects the same from its clients.

Tip 2: Implement a Systematic Follow-Up Strategy

Consistency is key when it comes to chasing invoices. Develop a systematic approach to follow up on overdue payments without being perceived as intrusive. Consider the following steps:

Pre-due Date Reminders: Send friendly reminders a few days before the due date to prompt timely payments.

Prompt Follow-Ups: If the payment becomes overdue, follow up promptly with a polite message. Keep the tone professional and understanding, expressing your willingness to assist with any issues they may be facing.

Automating these reminders through invoicing software can help maintain regular communication without requiring constant manual efforts. This systematic approach ensures that clients are consistently aware of their payment obligations, reducing the chances of misunderstandings.

Tip 3: Personalise Your Communication

While automation is efficient, personalising your communication can make a significant difference in how your messages are received. Clients are more likely to respond positively when they feel that the communication is tailored to them. Instead of generic automated messages, consider:

Using Their Name: Personalise your emails by addressing clients by their name.

Referencing Specific Invoices: Mention the invoice number and date in your communication to make it clear which payment you are referring to.

Expressing Understanding: Acknowledge that unforeseen circumstances may arise, and express understanding while emphasizing the importance of timely payments.

Personalised communication shows your clients that you value their individual business and are not treating them as just another account on your ledger.

Tip 4: Offer Flexible Solutions

Sometimes, clients may face genuine challenges that hinder their ability to make timely payments. Instead of adopting a rigid approach, be open to discussions and offer flexible solutions. This approach demonstrates empathy and a willingness to collaborate, fostering a positive relationship. Consider the following options:

Extended Payment Plans: If a client is facing temporary financial difficulties, discuss the possibility of extending the payment period.

Partial Payments: Allow clients to make partial payments if they are unable to settle the entire amount at once.

By offering flexibility, you position yourself as a business partner rather than a strict enforcer. This collaborative approach can strengthen your client relationships and increase the likelihood of future cooperation.

Tip 5: Escalate Professionally if Necessary

While the goal is to avoid annoying clients, there are instances where escalating the matter becomes necessary. However, it's crucial to approach escalation professionally and with a focus on resolution rather than confrontation. Consider the following steps:

Polite Reminder of Consequences: Remind the client of the previously outlined consequences of late payments.

Offer Assistance: Express your willingness to assist in resolving any issues that may be causing delays.

Clearly Communicate Next Steps: If the situation persists, clearly communicate the next steps, such as involving a collections agency or pursuing legal action.

Maintain professionalism throughout this process, and emphasize that your primary goal is to find a mutually beneficial solution. Escalation should be a last resort, but when handled professionally, it can demonstrate your commitment to securing fair business practices.

5 Tips on Chasing Invoices Without Annoying Your Clients | Key Takeaways

Automate reminders - Set friendly payment reminders that go out automatically – they tell clients they’re missed a payment without making it personal. It’s like your invoicing platform is giving them a nudge, rather than you doing it yourself. You can sign it off with just your business name, rather than your own.

Find out who’s behind the payments - Is there another person at the business who’s in charge of accounts or payments? Ideally, you want to be selling your services to your usual contact and chasing someone else to pay your invoices.

Enlist help from a friend - If you have a friend who also has a small business, become each other’s accounts support. Set your friend up with an ‘[email protected]’ address and they can send out email reminders and follow-ups to your clients, or call them about the invoice. Maybe you can do the same for them.

Set expectations when you negotiate the job - Firm and clear payment terms make it easier to get paid faster and keep that cash flowing. Set out your terms up front – it’s much easier to talk about your payment expectations when you organise the job, rather than once the invoice has been sent. For persistently slow payers, consider offering an early payment discount or ask for more money upfront for the next job.

Be nice, but firm - There’s no need to be rude or aggressive to your clients when chasing payment; you want to maintain a positive relationship. However, at some point you need to cut off their credit. Often saying ‘I’m very happy to do that for you, just waiting on payment of that last invoice’ will give them the impetus they need to pay you. But if they persistently don’t pay, no matter how much you like the client, you’re not providing a free service! Stop working for the client and chase those outstanding invoices more assertively.

Talk to us!

Chasing invoices is an inevitable part of managing a business, but it doesn't have to strain client relationships. By implementing these five tips—establishing clear payment terms, systematic follow-ups, personalized communication, offering flexible solutions, and escalating professionally when necessary—you can strike a balance between securing payments and maintaining positive client rapport. Remember, effective communication and a collaborative approach are key to fostering a healthy and enduring business relationship. If you need more help on this, feel free to reach out to us.

Related Links:
Payments and invoicing | business.gov.au
How to invoice | business.gov.au

Acro Accounting & Financial Planning (AAFP) offers a one stop solution right from accounting, taxation, financial planning to other business advisory services. As Certified Practicing Accountants (CPA’s) and professional tax advisors, we pride ourselves on being experts with the latest developments relating to business and taxation. We as professional public practice firm, provide high quality taxation and business advice to our clients through a personalised service at competitive rates.

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