How To Handle Late Invoice Payments With Clients

You've done the work. You invoiced the client over 30 days ago. You're still waiting for payment a week over the invoice deadline. It's time to chase but, quite frankly, you'd rather play 'Godwin by Korede Bello' on constant repeat and stick red hot nails in your eyes than speak to your client.

Let's face it. Chasing late payments on invoices is one of the toughest and most awkward jobs for any small business owner. It's never easy, emailing or phoning a client to ask for money. But - this is business. And you are entitled to be paid for the work you've carried out. So it has to be done.

If you're struggling and you're sick and tired of dealing with late payers, here are my top tips to help you get over that awkward hump…

Don't think you're being rude

You've done the work and the client is happy, so you're entitled to get paid. And, more importantly, you're entitled to get paid on time. You're not a bank. You're not able to work in credit. If you don't get paid, you can't pay your bills - full stop.

With all this in mind - you should stop thinking you're being rude by chasing payments. It's the client who is being rude by not paying! Plus you are totally within your rights to ensure you settle invoices. Remind yourself of these points whenever you feel yourself hesitating in future.

Set terms and expectations

Terms of invoicing are one of those things that every freelancer and small business owner will have to establish with every client. Talking about these terms early on will avoid any awkwardness further down the line. So ensure you set down the rules as soon as possible.

Not sure what terms to apply? You really can set your own terms. Some people charge an extra 3% after 60 days - others 2% after 30 days. Another creative stipulates that if the final invoice isn't paid within 30 days, a 5% 'delayed payment' fee is charged. And that initial 5% figure is then added to each recurring 30 day period until the full amount is received. It's really up to you how you set your terms.

Have a script to hand

Writing an email to chase for payment is hugely difficult and will naturally take you some time to construct. You don't want to come across aggressive but you also need to be firm. You don't want to seem too demanding but you have to ensure payment is made. In which case, save yourself time by having a prepared script you can call upon. Here are some handy examples:

"Hi Cynthia,

This is a friendly reminder that invoice 041 is now due for payment. I'd really appreciate if you could settle at your earliest opportunity.

Regards,
Ugo"

And if several friendly emails don't lead to payment? Well, it's time to start getting serious and remind your client of the terms you originally set out. You could write something like:

"Hi Buhari,

Payment still hasn't been made for invoice 041. I attach another copy with my payment details.

Just to remind you - if payment is not received within 30 days, I reserve the right to add late payment charges to your account, as detailed in my terms.

Hope that makes sense.

Regards,

Kemi"

Pick up the phone

If you've emailed several times, you've become increasingly firm and you still haven't been paid - pick up the phone and call your client. Sometimes having a chat is all it takes to ensure payment. Keep phoning every other day to add some pressure and that usually does the trick.

Or - if you really can't face the task - hire a freelance virtual PA to do the chasing for you. Sometimes having someone else doing the chasing adds more authority to your business and gets clients worried about not paying.

Make things automated

If you really can't stand sending out those email reminders - why not automate away some of that awkwardness by using an online service to send out automatic invoice reminders for you?

It allows you to write your unpaid invoice reminder email, then you can configure it to send it automatically when an invoice becomes overdue. Job done! It won't necessarily ensure payment, but at least it saves you from another awkward conversation or the hassle and time it takes to chase for payments. 

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