Chasing Unpaid Invoices – 5 step action plan

Chasing Unpaid Invoices – 5 step action plan

What is the best strategy for chasing unpaid invoices? When you have provided goods or services that the customer is happy with, it is natural they should pay within your terms. This is fundamental within the Business world. Regrettably, this is not always the case as any Business owner will know.

The problem starts when the terms of your Business invoices have not been met. Most Business owners allow further time for payment to be made as goodwill. 14 days is kind of the normal time where people start to wonder if they are going to get paid at all. It is at this precise point your customer is now starting to waste your valuable time too.

It is critical your enterprise maintains a healthy cash flow. This is the heartbeat of your business and the key to survival and success. It is detrimental to the welfare of your business not to take action when invoices are not paid. Thousands of Businesses collapse every year due to unpaid invoices, do not let yours be one of them.

Our Expert Commercial Debt Collections Team have produced some simple pointers to help keep your cash flow at a peak. You want to maintain good relationships with customers but who wants a customer that does not pay?! Always keep your cool and you will likely get paid sooner rather than later or not at all.

5 Step Action Plan for chasing unpaid invoices

1. Send them a reminder letter

Your first reminder letter should be polite and Professional. Communication is key to all forms of problem-solving and this scenario is no different. Clearly state the invoice payment is overdue and for them to please send payment in respect of the given invoice. This usually does the job. Something as simple as the following:

“Dear Richard,

Just a quick reminder to advise that Invoice 007 is due for payment. We would appreciate it if you could kindly settle it at the earliest opportunity. We have attached a copy for your convenience and attention.

Kind Regards

Your Company”

This is standard practice for most Businesses that are chasing unpaid invoices in the UK.

2. Send a statement of the customer’s Account

If not payment is made and there is no contact from the customer, you should consider sending another letter or email. This will clearly explain the invoice is overdue and outlines the outstanding payments due.

The tone of communication should remain friendly and courteous.

3. Pick up the phone and call them

It is much easier for people to ignore letters or emails then a phone call. Getting on the phone to your customer is basic customer service and makes it easier to request payment. If you have already completed tasks one and two, this is a natural progression from that.

It will allow you to directly engage with them and ask if there are any issues.

It could be that your Customer is experiencing their own cashflow struggle and needs a payment extension. Whatever the response, it should give you a clear indication of how things will progress from here.

4. What if they still do not pay the invoice?

If payment is still not forthcoming then you still need to chase them. Chasing unpaid invoices is counterproductive however it can secure payment.

It is advisable that you do not let it consume too much of your day or your emotions. By regularly reaching out to the customer, it lets them know that you are not simply going to give up on getting paid.

If a payment date is promised, try to make sure it is confirmed by email. You should also consider advising them that you will not be able to provide any more goods or services till the outstanding invoice is paid.

5. When should I consider using a Professional Debt Recovery service?

If all reasonable efforts at getting payment have been exhausted then it may be time to call the Experts. Chasing unpaid invoices can be an expensive and frustrating exercise that is counterproductive. This helpful video can help with tips to get unpaid invoices paid, regardless of whether you are a large or small business.

Business Debt Collection specialists are highly experienced in such scenarios and will know the best options for recovery. Tailor-made strategies and bespoke solutions will see your unpaid invoices get paid quicker.

At Federal Management, we offer a Free assessment of all Commercial Debt Collection enquiries. We will investigate the Debtors circumstances and their ability to pay. We can also look if they are subject to any other Debt Collection and enforcement action. It will provide a clearer perspective on the problem and allow you to act.

If you or your business are owed money, speak to one of our friendly Debt Collection Experts today for free advice and information.