5 Tips For Collecting Past Due Invoices Painlessly

You send your invoices to your customers, each with a clear and specific due date. Yet, when the due date arrives, payment does not.

Unfortunately, unpaid invoices hurt the cash flow of your business. So how do to get your customers and clients to pay AND pay timely for the invoices you send?

Let’s talk about collections!

Often, the thought of collections leads a few to envision a threatening, low life thug with a hairy chest and big hands, dressed in a pin striped suit, who threatens to take a kidney unless a payment of some ridiculous sum is received by sun down.

…or maybe I’m the only one that envisions this?

Fortunately collecting on invoices does not have to resemble a mafia like shake down from the movies. Really, it is about establishing or re-establishing communication with the customers and clients that support you and your business.

The fact is, most of your customers want to pay you. That’s great news!

Let’s discuss how to successfully collect on past due invoices while maintaining a good relationship with your customers and clients.

Photo Credit: Flickr via Creative Commons

Verify That The Payment Is Outstanding

Be sure to get your ducks in a row first!

Do this by ensuring all cash receipts have been deposited and matched to outstanding invoices. When you are sure all cash has been deposited and matched, review the A/R Aging report.

It doesn’t make your business look good if you contact your customer or client about a past due invoice only to realize that payment had already been received. Not to be dramatic, but being disorganized can be the difference between keeping and losing a client or customer.

Send a Courtesy Email

Sometimes the customer or client does not receive the invoice because it got lost in the mail or swallowed up in the spam box. Or maybe the recipient forgot that payment was due.

Whatever the reason, an email to that client or customer is the perfect first step in the collections process.

For you, the collector, an email can be a low stress, low offense act. For the recipient, the email could also be a low stress, low offense act that leads to payment.

Let’s quickly discuss what should be in the email:

The email should be a short, polite reminder, not a nasty-gram. Being nasty actually hurts your chances of getting paid. Remember, the collections process is about maintaining and establishing communication between you and your client or customer.

Here is an example of an email reminder I