When you run a business, some tasks can leave you with a pit of dread in your stomach. One of these is handling unpaid invoices. 

You've worked hard to secure a new client, build a relationship and provide the service. You issue the invoice and wait expectantly as the due date approaches and sails past.  

The uncomfortable feeling starts. Do you let the situation slide for a few days, a week, before making first contact, hoping it resolves itself? Welcome to payment-chasing anxiety. If you're worried about broaching the subject of late payment, here are some things to remember: 

1. You Can’t Second Guess

If you're feeling icky about taking action, it's tempting to procrastinate and come up with reasons to explain the lack of payment. 

Perhaps it’s a genuine oversight, maybe they have a query, they could be on leave, or they've rushed their cat to the vet with a suspected verruca. 

Whatever the reason is, you won’t know unless you contact them. 

2. You Have Bills to Pay

You know your financial commitments, and while it might feel easier to hold off a little longer, not everyone else will do you the same kindness.

3. It’s Business

If you’ve established a rapport with a client, it can feel personal. Great, but this is principally a business relationship.

Set boundaries from the outset to be clear on expectations for both parties. Make your client aware of your payment terms before starting any work. 

If your client has an accounts team, direct any payment queries to them, and you can stick to the light and fluffy conversations with your contact.

4. Clients Are Managing Cash Flow Too

You're not the only business to experience issues with late payments. Your client will have processes to deal with this situation and will understand your need to follow up on an unpaid invoice. 

As part of their cash flow management, some companies will try their luck, and if they can get away with stumping up later than your payment terms, they'll do it. Be proactive, and you're more likely to stay at the top of the priority list. 

5. You Don’t Have to Be a Rottweiler

You don’t have to dive straight in with anything too heavy or formal. Your initial approach can be a friendly email, something along the lines of:

“Hi xxx

Just sending you a quick reminder that your invoice xxx is due for settlement.

Please can you arrange payment at your earliest opportunity?

Kind regards

xxx”

Create an email template ready to use as and when you need it.

6. What Does It Say About Your Client?

If your client hasn't paid, it could be a genuine mistake or an exceptional circumstance to explain the situation. It happens. We all drop the ball occasionally, and things crop up. Having some give and take makes for a productive working relationship, but what if it becomes all take?

It’s understandable to want to retain a hard-earned client and keep them on side, but if they persistently delay payment and put your cash flow at risk, then is their business worth it? Don’t allow the prospect of losing future business to hold you to ransom. Could your time be better spent developing relationships with new clients who won't give you the run-around? 

Unless you’re a credit controller, chasing payment is unlikely to be the most enjoyable aspect of your day, but don't let feeling awkward prevent you from acting. The sooner you take the initiative, the less likely it is to escalate into something more painful.

GUEST BLOGGER AUTHOR:

ZOE LAMBOURNE