Things to Consider When Dealing with Overdue Invoices for Your Business

Things to Consider When Dealing with Overdue Invoices for Your Business

Overdue invoices can cause a huge number of problems for your finances as a business owner. When you don’t set very clear terms for your invoices, you will find yourself dealing with overdue invoices. This can waste a huge amount of your time and energy, which you no doubt would rather spend doing other things. Today we’re going to share some of our top tips to help you deal with overdue invoices and reduce frustration in this area in the future. Here at Direct Route, we are here to support you with any challenges you are facing, so don’t hesitate to contact us when you need assistance in the future.

Set Clear Terms of Payment

The first thing you can do to protect yourself from overdue invoices is to set very clear terms of payment when you initially send the invoice. Make it very clear when you expect to receive payment and state any late payment fees you will charge if the payment isn’t made on time. The clearer your communication is with clients from day one, the more likely they will be to be respectful of your payment terms. This is one of the top things to consider in overdue invoices, so that you don’t put yourself in a difficult situation in the future.

Email to Follow Up

After you have sent your initial invoice, it’s time to have a set procedure in place to follow up with overdue invoices. If it gets to a few days before the payment is due, then you need to send an email reminder to follow up with the overdue invoicing before it’s past the deadline you’ve set. Sometimes people just genuinely forget to pay an invoice, especially when they have so much going on within their business. Make sure you send these emails in a courteous and friendly manner, so that you don’t put clients off from working with you again if you are too aggressive.

Phone Call Follow-Ups 

Following on from an email follow up, it’s time to take further action and get in touch by phone with your contact at the business you’ve been working with. An overdue invoice can easily be overlooked when companies are busy, so this phone call may be the nudge that’s needed in order to get your payment on time. Once again, focus on offering good customer service at all times, as you still want clients to return to you in the future. Try to understand if the client received the invoice in the first place and what the issue is from their side as far as making the payment. It may just be a simple misunderstanding which can be rectified in no time at all with this one phone call.

Send a Monthly Statement

If your overdue invoice issues have been going on for some time now with a company, then we recommend sending them monthly statements to follow up with the issue. This can also add on any late payment charges, so the company is aware that these are being added now that the payment is overdue. A monthly statement can be sent each month until you receive the payment, and it will help to stop companies thinking you’ve just forgotten about the overdue invoice.

Take Further Action When Needed

After following all the steps we’ve shared above, you need to think about whether it’s time to take further action. Of course, every situation is different, and it’s up to you to decide which invoices are worth fighting for. The more money that is overdue, the more important it will be to your business, but you also need to try and treat all of your clients fairly. Once you’ve taken the time to understand if there was a genuine issue with their missed payment, then you can work to see the best route of action for any invoices that still haven’t been paid. Our team will be able to suggest what the top option would be based on any situation, and we’ll offer you the guidance and support to get the payments you’ve worked so hard for.

There are many things to consider when dealing with overdue invoices for your business. The number one thing to keep in mind is that you need to remain patient and calm at all times when dealing with this situation. You don’t want to put clients off from working with you again in the future if you are rude or aggressive with them too early on. Instead, try to offer them good customer service and be understanding of the situation they are in. By following the tips we’ve shared above, you can take back control of your finances once again and work to avoid overdue invoices in the future.