THE 60 DAY-GUIDE TO COLLECTING LATE PAYMENTS AND OVERDUE EXPENSES FROM CLIENTS

We shouldn’t be worried about getting payments for jobs well-done when we undertake our daily business routines. However, saying that doesn’t mean one won’t come across clients who either, forget, or refuse to pay up. You may encounter them occasionally despite taking careful time to craft the perfect invoice and following all the best practices as you do so and send these invoices to your respective clients.

This necessitates a clear plan that needs to be put in place to follow-up on any cases of late payments. It is important to note that while every situation is unique on its own, there exists a basic timeline to help you follow-up a client when he is late in paying an invoice.

This guide is based on the assumption that an agreement exists between you and a client to receive payments on a monthly schedule every 1^st or on the 15^th of that month in the case of a delay in payment.

At Day 15

At this point in time, over 2 weeks have passed since you last sent out your invoice to the client and still you haven’t received payment.  This is where you send a polite reminder to kindly inquire whether your invoice was received and request payment. On the other hand, you could use this opportunity to send an additional invoice to reflect any outstanding bills from the first month of service.

It is also a good idea at this point to include any charges and penalties for late payment say if you charge between 1 – 2 %.

 On Day 30

Consequently, following the passing of a whole month with no payments being received for both the invoices from 1^st and 15^th date of that month, it’s time to make that phone call or schedule a personal meeting with the client to find out what’s causing the delay in payment. A number of things could be achieved out of this;

• You could get an opportunity to ask your client, whether they received the invoice and if there is anything that could possibly be done to speed up the process of payment on their end.
• You could inquire and set a date when these payments will be made.

Between Day 32-45

This is probably when you should start by being persistent in your follow up. Generally, give it a day or two after your 30-day follow up with the client before you begin to really call and email more regularly and persistent on a daily basis. This is a period when delaying payments begin to frustrate you, but always remember to stay calm and professional no matter how angry you become.

Also, remember to put on hold any more projects you might have with the client until payment is met and make this very clear as you regularly reach out to them. One last thing here, remember to bill the client in penalties arising from late payments through a series of invoices.

At Day 60

I have to say getting to this point as you wait for payment is quite rare, but it doesn’t make it any easier on your part. This is the defining moment where you either accept collections if the clients finally decided to pay or resolve to lose because the client has simply refused to cooperate. Some may even call it quits.

There are a number of options for you at this point:

• Try one last reach out via call and make one last firm reminder. Make it even more personal by dropping by their office to make your plea heard.
• Hire a collection agency to pursue your payment on your behalf.
• Revise your payment follow-up process. How:

Leave it to the “machines”. You could try to automate with email reminders that take care of all your reminders for you. This means you could sit back and let the automated process take over the process of reaching out to clients and reminding them of their overdue expenses.

• Cut your losses. If there is still silence from the client’s end, it could only mean two things, either their business has gone into bankruptcy, or that they have bolted and skipped town in fear of settling their outstanding payments.