Statrys Payment Platform Ecosystem

How to Chase Unpaid Invoices (with Email Examples)

Statrys Team
Published: 27 Oct 2020

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    The hidden costs of doing business are immense. Consumers often overlook the sheer amount of money that goes into most business decisions and operations.

    But money is a tangible concept that most understand. It gives a measurable definition to what things to cost. Unfortunately, there’s another cost of business that is often hard to explain - time.

    Obviously, you love your clients. If you didn’t, you wouldn’t be in the business of making them happy. Your specialty is fulfilling their needs, and you do that very well.

    Unfortunately, this also means that they can sometimes forget about your needs. And you need payment in a timely manner in order to continue doing your job as well as possible.

    If your customer, client, or retailer is leaving invoices unpaid past their due date, you need to step in and make sure they know the agreement.

    It can be awkward, uncomfortable, and it can even feel rude at times, but it is absolutely crucial.

    It’s important to chase invoices the right way. Too soft, and you’ll never get your money. Too hard, and you could lose a client. The tools and strategies below will help you get paid while maintaining the fantastic customer relationships you’re known for.

    Preventing Unpaid Invoices by Establishing Interest Rates or Late Fees

    As is the case with most things, preventative measures can save you a lot of time, money, and stress. Washing your hands is easier than getting sick. Paying taxes is easier than getting audited. Stretching before a workout is easier than dealing with a pulled muscle.

    Preventing unpaid invoices is one of the best things you can do for your business. To do it, you need to make clear deadlines for payment, and well-defined consequences for unpaid invoices.

    It’s not rude. Fair money for honest work is the backbone of modern society. Without it, progress would halt entirely and things would begin to fall apart. There is nothing wrong with getting what you deserve in a free market system - in fact, the system depends on it.

    Implementing an interest rate into your payment structure is very effective. This can be any percentage, tacked on to the invoice total at the end of each overdue month. This incentivizes early payments and can greatly reduce the amount of time you’ll have to spend chasing unpaid invoices. Late fees accomplish this same goal.

    Regardless of what you choose, you should make it very clear that these fees are in effect from here on out. You’ll likely see a lot of payments from customers or retailers who previously couldn’t pay. Interesting coincidence.

    What To Do If You Have Unpaid Invoices

    The first thing to do when you have unpaid invoices is to breathe. We know it can be frustrating, but getting angry could make the situation much, much worse. Try to sympathize with your clients. Maybe they’re going through financial problems. Maybe they just have so much on their plate that they simply forgot about the invoice.

    Keeping yourself calm will allow you to make the right decisions, and to communicate correctly, in order to get your payment without burning any bridges.

    Start by simply reaching out to the non-payer. Often, clients just need a little reminder to jog their memory. Most of the time, you’ll get your payment and an apology!

    If reaching out via email or message doesn’t work, try to call them. If they are deliberately delaying payment, this is a great way to appear more serious. It also prevents them from ignoring the request and forces them to have a reason for non-payment.

    Take their reason in a friendly and understanding manner - they are most likely telling the truth, and guilting them or accusing them of lying is a great way to lose the client forever.

    If your client mentions financial problems, work with them to create a payment plan. Offering to accept smaller payments over a long period of time is a great way to get your payment while building trust and rapport.

    If payment method problems are creating invoice payment delays, consider using Statrys to set up a non-bank business account. It’s one of the easiest ways to send and receive payments digitally, across borders.

    If the client promises payment at a future date, get the date from them and mark it down. This gives you more leverage if non-payment continues since you can bring up the record and give them a reason behind your concern.

    If non-payment continues, you may need to get firm. It helps to explain the effects of their non-payment. Remind them of interest and late fees. You can also explain that it hurts your business and affects your plans for the future. Again, use this method in a friendly manner.

    For the most severe of cases, it may be necessary to bring in the possibility of legal proceedings. If you have a very large, very late invoice, you are entitled to court proceedings to get the money.

    Often, merely mentioning legal action will get a payment out of a pesky client. But be sure you have the lawyers and resources to follow through - you want your words to have an impact in the long run, which is impossible if everyone knows you won’t actually go to court.

    Legal action should be your last result - it will be expensive and time-consuming, so you need to make sure it will be worth it. Obviously, you will lose whichever client you’re taking to court.

    As a final reminder, stay professional and courteous throughout the whole process. Antagonizing a client won’t get you very far.

    Good luck!

    Before you go, check out our email templates below for communicating with non-payer. Feel free to copy them exactly, or add your own words.

    Unpaid Invoices Email Templates

    1. Use this example for clients with small accounts that seem to have just forgotten about the invoice:

    Hello [client name]!

    This is [your name] with [your company]. We just wanted to give you a quick reminder that invoice [invoice number] is due on [due date] in the amount of [invoice amount].

    If you experience any problems with payment, please let us know and we’d be happy to help!

    Thanks!

    1. Use this one for clients with moderate accounts, who have been putting off payments for a while.

    Hello [client name], 

    This is [your name] with [your company]. We noticed you have an unpaid invoice from [invoice date], which will begin/has begun accruing interest/late fees as of [date the fees came/will come into effect.]

    Prompt payment of this invoice will reset the late fees for the next invoice. Let us know if you have any issues or questions.

    Thanks!

    1. Use this when a large client has been delinquent on payment for a long time.

    To the payments department at [their company name]:

    Please note that invoice [invoice number] is overdue by [amount of time since invoice was due]]. 

    Because of the potential effects of this non-payment on our core business, we have been forced to consider legal action against [their company name] in order to receive our funds.

    Please contact us at [contact info] so we can discuss your account, potential agreements, and next steps.

    Thank you,

    [your name]

    [your company name]

    Remember: After legal action officially begins, you should no longer contact the non-payer directly. Leave it to the lawyers and the court.

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    Statrys Limited is licensed as a Money Service Operator (No. 19-02-02726) in Hong Kong. ‍ Statrys UK Limited is a Small Payment Institution (FRM: 911226) registered with the Financial Conduct Authority in the United Kingdom. Statrys UK Limited (FRM: 902805) is a registered agent of PayrNet Limited (FRM:900594), an Electronic Money Institution authorised by the Financial Conduct Authority in the United Kingdom under the Electronic Money Regulations 2011 for the issuing of electronic money. Trade financing services are offered by our partner, Velotrade Management Limited, regulated by the Securities and Futures Commission of Hong Kong (CE Ref #BJL007)