Do you struggle to get paid? 4 Steps for Getting Paid
Getting paid is sometimes the hardest aspect of running a business. Ensure that you or someone in your organisation is charged with following up on invoices.
Once you’ve sent an invoice, it is important to reconcile payment, and follow up with clients who have not paid.
Here are 4 steps to take to follow up payments, with template provided by Business Victoria below.
Step #1 A friendly reminder
When payment first becomes overdue, you can give your customer a courtesy reminder by phoning or emailing them.
Contacting them may be enough to get the invoice paid – they might’ve forgotten about the bill, paid the money into the wrong bank account, or there could be another minor issue that’s easily and quickly resolved.
Include payment options, banking details, and contact information in the reminder to make it easier for the customer to pay you quickly.
Step #2 Overdue Payment
If you’ve sent a friendly reminder and payment remains outstanding – and the customer has missed the next agreed payment date, or there’s been no contact at all – you can give the customer another call, or send another email reminder of the money owing, and request payment.
Step #3 Final Notice
When the customer hasn’t paid as per the terms of payment – and has missed any extended payment dates again – call or email them to discuss the outstanding invoice and request payment.
Step #4 Letter of Demand
If all your attempts to contact your customer and receive payment have failed, consider sending a letter of demand. Keep in mind this procedure should only be done as a last resort as it has the potential to damage the business relationship established with the customer. You can use the Business Victoria templates as a reference.
Business Victoria has developed a series of templates to assist you in following up on payments including:
- friendly reminder email template
- overdue email template
- final notice email template
- letter of demand email template
If you have any questions or concerns about your payments please contact your STS Accountant.
