How Far Would You Push To Claim An Unpaid Invoice?

[WeltZumerr12]

Asking clients to pay invoices for services or products that you have provided in good faith is definitely not rude. All businesses need to be paid to enable them to function and hopefully grow especially if you are an SME. I have more than 20 years of experience in Credit Control and can advise that a large % of businesses will only pay once they have been reminded!

Welcome to the forum! It's great to have you here. It sounds like you have a lot of experience in credit control, which is great. I'm sure all the members here will be able to benefit from your expertise. It's good to know that it's perfectly ok to ask clients to pay invoices - it's a necessary part of running a business!

 

[Sandy]

Many larger companies have a person who's only job is to avoid paying invoices. They'll delay until they're chased. If you don't chase you won't get paid.

I never chase my customer for payment. If they don't pay I simply don't supply. The department that wants my services calls asking me to come in to do such and such and I say - "Sorry. You're on hold". That soon gets a check cut.

 

[Ford Jones]

It's unfortunate when clients don't honor their commitments, and unpaid invoices can affect your cash flow and financial stability. Here are some steps and considerations for chasing unpaid invoices:

1. Set Clear Terms and Conditions:
   • As you've started doing, always specify the due date on your invoice. Typically, payment terms are net 7, net 14, net 30, etc., which means payment is due 7, 14, or 30 days from the invoice date.
   • Include any late fees or interest charges for overdue invoices in your contract or terms of service.
2. Send Friendly Reminders:
   • If a payment is a few days overdue, send a friendly reminder email or call the client to check if they've received and reviewed the invoice. Sometimes, emails get lost, or the client might've simply forgotten.
3. Invoice Promptly and Consistently:
   • The sooner you send an invoice after completing a task, the fresher the task will be in the client's mind, increasing the likelihood of prompt payment.
4. Offer Multiple Payment Methods:
   • Providing clients with various ways to pay (e.g., bank transfer, credit card, PayPal) can make it more convenient for them.
5. Follow Up with a Formal Letter:
   • If the payment is significantly overdue, consider sending a formal letter or email expressing your concern and requesting immediate payment.
6. Consider Invoice Factoring or Financing:
   • Some businesses sell their unpaid invoices to a third-party company (a factor) at a discount. The factor then pursues payment from the client. This is a way to get some cash upfront, although you'll receive less than the invoice amount.
7. Hire a Collection Agency:
   • If the unpaid amount is substantial and you've exhausted other options, you might consider hiring a collection agency to recover the funds. However, be aware that this can strain the client relationship.
8. Small Claims Court:
   • For amounts that are still significant but not large enough to justify hiring a lawyer, you can consider taking the client to small claims court.