You’ve sent your sales invoice by the book. Now you’re waiting for payment… but what if that invoice goes unpaid?
It can happen that your customer hasn’t paid an invoice and the due date has passed. Every business owner has their own approach to this problem, but let’s go over the most obvious options.
Send a payment reminder 📩
A friendly payment reminder is often the first step. Simply send a letter, email, or WhatsApp message asking your customer to pay the outstanding invoice as soon as possible.
It’s always possible that the customer has simply lost track of your invoice. In such cases, a quick reminder will ensure payment.
When should you send a payment reminder?
Our accountant explains when it’s best to send a reminder.
The customer disputes the invoice
Your customer may disagree with your sales invoice due to the hours billed or the services provided. ❌ In such cases, you can always try to negotiate a compromise with your customer. The goal is to reach an agreement that both parties can accept.
Have you reached a verbal compromise with your customer? Be sure to have that solution confirmed in writing or via email.
Send a formal notice 📬
If you don’t receive a response to your payment reminders or can’t reach a settlement with your customer, you can then proceed to send a formal notice (also known as a notice of default). It’s best to send such a notice by registered mail and keep the proof of mailing in a safe place. This way, you’ll have the necessary proof later that you actually sent something.
Such a formal notice is actually very similar to a payment reminder. You state that you expect the full invoice amount (plus any interest or reminder fees in accordance with your terms and conditions) to be deposited into your bank account within, for example, 5 business days.
To reinforce your claim, you can also state that, otherwise, you will hand over the outstanding invoice to a collection agency, bailiff, or lawyer, and that your customer will be responsible for the resulting additional costs. 🧑⚖️
Call in a collection agency
Has all your previous communication failed to make an impression? Then you can turn to a collection agency. The advantage of collection agencies is that they usually operate on a “no cure, no pay” basis. In other words, the agency’s fees are passed on to your customer. This makes it a good solution for business owners.
When your delinquent customer receives a demand letter from a collection agency, it makes quite an impression, which usually results in prompt payment. 💶
But hopefully, you won’t have to go that far!
