A general rule is to always invoice as soon as possible and ask your client to acknowledge receipt.
You should of course ensure your invoice is accurate and all the details are correct. Keeping the receipt on file to prove that you delivered the invoice successfully is a good practice.
Then, make a note of the invoice details and follow-up with your client as the due date approaches, rather than waiting until it’s overdue, particularly with invoices for large amounts. If possible, get to know the person responsible for settling invoices at your client’s business as it can facilitate payment. As the payment deadline approaches, follow up with a friendly reminder that you expect prompt payment.
If they miss the payment deadline, chase the outstanding invoice quickly – ideally in writing with a unpaid invoices letter – while keeping up the dialogue and ensuring they understand that you won’t accept non-payment. You can also establish an automated reminder process to remind clients of their payment obligation and maximise your chances of unpaid invoices recovery.
In your unpaid invoices letter, make sure you include the following:
- Details of both companies (name, address)
- Date of your letter
- Key contact at your company
- Payment references, invoice number
- Total owed + interest or charges if you choose to add them (explain these charges)
- Explain clearly that the payment is past due and the customer has breached terms
- Refer to previous communications
- Information about what happens next, including final payment date and the consequences if your customer still won’t pay (debt collection, legal proceedings).
You should keep information about your invoices in an accessible format that gives you a clear picture of late payments.