There are many reasons business owners might incur overdue payments. For example, a customer might have lost their original invoice or simply forgotten to pay on time. These scenarios are why it’s important to learn how to ask for payment.
Whatever the reason for late payment may be, you have to send a payment reminder email to get your customer to settle as quickly as possible. However, writing a late payment reminder email can be tricky, especially if you’re worried about sounding rude or demanding.
In this guide, you’ll learn a few tips for writing a direct yet friendly late invoice email and how to follow up when your customer fails to pay.
Why is it important to ask for payment?
Following up on late payments keeps your cash flow healthy and is an excellent way to maintain a positive business relationship.
When you follow up on late payments, you garner your customer’s respect without jeopardizing your reputation or finances when you hold your customers accountable.
How to ask for payment professionally
Here are a few ways how to ask for payment after completing a project and the payment due date has passed.
Approach your customer for payment at the right time
Letting too much time pass after sending an overdue invoice significantly decreases your chances of getting paid. Politely request payment a day after it’s due – you never know when they might’ve just overlooked their outstanding invoices.
Check if your customer received an unpaid invoice
Before figuinr out how to ask for payment again, make sure that you indeed have already requested payment.
You don’t want to follow up on an outstanding invoice only to find out you forgot to send one in the first place! When sending your customer a reminder, make sure there were no miscommunications or errors on your end. Ask if they encountered any problems with the original invoice and send them another copy if necessary.
Provide multiple payment options
It’s possible that your customer hasn’t paid on time because they struggle to meet your payment options. If you encounter this problem frequently, you might want to consider introducing multiple payment options like:
- Credit card.
- Money order.
- Online payment portal.
What to include when asking for payment
One of the most important elements in figuring out how to ask for payment is knowing what to include in your request.
You should include a few essential components in your overdue invoice email. These include:
- A direct subject line: Let your customer know what the email is about from the get-go. Write something like: “Payment for Invoice # [Number].”
- A copy of the invoice: Save your customer the time finding your initial email by attaching a copy of your original invoice. Make sure this document includes the agreed written quote, due date, and project reference.
- Your payment terms: Reiterate your payment terms, including the payment process, accepted payment methods, and your late payment fee.
- Your bank account or payment provider information: Don’t leave anything to guesswork – make it easy for your customer to pay you by providing your complete bank account or payment provider information.
When to send a payment request email to a customer
One important element to know how to ask for payment is knowing when to ask for payment.
You don’t want to let too much time pass before sending a friendly reminder of an unpaid invoice. The best time to send your first reminder is when the invoice is due.
Your next question might be: how often should I follow up with a late-paying customer? Consider sending follow-up emails within regular intervals like:
- The day after the invoice is due.
- A week after the invoice is due.
- Two weeks after the invoice is due.
- A month after the invoice is due.
The longer it takes a customer to pay you, the more you’ll have to adjust your invoice late fee wording. Be professional but make sure they know your request is urgent – be firm, direct, and list the consequences they can expect from non-payment.
What does it mean to be rude when asking for your payment?
Part of figuring out how to ask for late payment is learning of how do so in a friendly way.
Talking about outstanding payments is never a comfortable conversation to have. In some cases, professionals will fail to follow up for fear of being rude. So, how do you get over this fear and ask for the compensation you deserve?
Before you send your follow-up email, consider the following:
- Is the project fully complete?
- Did you discuss your contract terms and methods before starting the project?
- Are you asking for the agreed-upon amount?
If you answered “yes” to all these questions, you could justify sending your customer a polite reminder about their payment. When being professional in your request letter, the most important thing to keep in mind is not to make things personal – don’t discuss why you need to be paid on time or how on-payment affects your business. Focus on making a clear demand and providing helpful information.
Payment follow up email
Are you unsure of how to word your follow-up email? Use this email template for reference.
“Hi there [Name],
We hope this email finds you well. We understand that it may be a busy time, but we wanted to remind you of your outstanding payment on invoice # [number] due [date]. We have attached an additional copy of the invoice for easy reference.
If you have any questions regarding your payment, please don’t hesitate to reach out. We are happy to answer any of your questions.
Thank you in advance,
How to ask for payment if you’re still not getting paid?
Your method of how to ask for payment will be different if you have trouble reaching your customer. In the worst-case scenario, you might not get a response from your customer at all. While it can be frustrating, taking a more direct approach can work to your advantage.
Speak to the customer by phone
Compared to emails, phone calls are harder to ignore. If you can get your customer on the phone, they can’t dodge any questions or make up excuses. Plus, they might’ve simply overlooked your invoice email and just need a stronger nudge.
Consider cutting off future work
If you have other ongoing projects with your non-paying customer, pause existing work to reinforce their overdue invoice as an urgent problem. Pausing work can also mitigate the risk of going an additional few months without payment.
Research collection agencies
If a customer still refuses to pay, you may have no other option but to consult a collection agency. However, remember that using a collection agency should be your last resort, as it’ll likely ruin your business relationship. Also, note that debt collectors will typically keep a percentage of the money they get back for you.
What if your backup plan doesn’t work?
If none of the above tips work in your favor, now might be the best time to consider legal action. Some legal options for non-payment include:
- Placing a lien on your customer’s business.
- Going to a claims court.
- Filing a civil case for larger amounts.
Tips and strategies for getting paid on time
Although it’s good to know how to ask for payment in case you do end up in a situation where your customer’s payment is overdue, it’s best to avoid getting into that situation in the first place.
One of the best ways to avoid chasing a payment that is days or weeks overdue is to make sure your customers pays on time from the beginning. Here are a few tips for helping your customer avoid missing a payment deadline.
Provide the customer with precise records of your work
Keeping detailed and accurate records of your projects means you’ll always have proof of when you need to receive payment from customers. Using timekeeping software helps you keep detailed track of your billable hours and send these reports to your customers whenever necessary.
Pick a great payment processor
As much as possible, you’ll want to introduce multiple payment options to make it more convenient for customers to pay you. With more options on the table, customers are more likely to pay upfront and have no excuse for non-payment.
Popular payment processors that are easy to deploy and require low transaction fees include PayPal and Stripe, which are available internationally.
While you shouldn’t judge a book by its cover, customers are more likely to pay businesses that provide clean and aesthetically pleasing invoices. When invoices are inaccurate and hard to read, customers may become discouraged from settling them or following up to ask questions.
An invoicing tool can help keep your documents consistent and automatically save information for repeat customers. Automated tools can also reduce the risk of human error and provide quick reminder options through email, phone calls, or SMS.
Draw a contract
Invoices are not legally binding, but contracts are. To avoid any issues regarding future invoices, thoroughly outline your payment policy through a contract. A solid contract should include the following information:
- The parties involved (you and your customer).
- The scope of the project.
- The date for project delivery.
- Payment terms and methods.
- Penalty fees in the case of late payment.
- An outline of potential legal action in case of a dispute.
While a comprehensive contract doesn’t guarantee on-time payment, it’ll make customers less likely to deviate from your payment schedule.
Ask for an advance deposit
Sometimes, it’s hard to scope out the customers who are willing to pay from those who aren’t. One of the best ways to determine whether a customer is willing to compensate you fully and on time is to impose an advance deposit or down payment. This amount is up to your discretion, though most freelancers and businesses will charge a down payment of 40% and 50% of the final bill.
If you think a higher advance deposit might scare away your customers, you can consider decreasing this number or asking for incremental payments when you achieve specific project milestones.
Knowing how to ask for payment is a key skill for every business owner. When sending a payment reminder letter, you can avoid being rude by using firm yet friendly and professional language. To ensure that you reach the goals you want, take precautions to provide all the information your customer needs to pay you on time.
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