Preventing Overdue Invoices
The best way to prevent overdue invoices is to not let them happen. Sounds simple, right? There are a few ways to prevent it.
Accept full payment upfront—no due date hassle
If you accept 100% payment upfront, then there’s no risk of overdue invoices or clients holding payments hostage. For small budgets, less than $3K, I’ve never had a client balk at paying 100% upfront. And if they do, you could offer them a choice. Pay 50/50 or pay 100% upfront and receive a 10% discount. No one turns the discount down.
Set shorter payment terms to avoid overdue invoices
When a bill is due in 60, 45, or even 30 days. It’s very easy to forget about. Plus you as the consultant are now accept as a short term interest free loan service. That’s why I’ve switched to 15 days as my default (and received no complaints about it.)
A better way to manage your finances
With Hiveage you can send elegant invoices to your customers, accept online payments, and manage your team — all in one place.
Send an automated payment reminder
Most invoicing software (I use and love Hiveage) can send automated reminders when an invoice is due. In the case of Hiveage, I send a reminder the day the invoice is due and immediately the day after. I have no shame about expressing urgency over it.
Subject: Account Alert: Your payment is due today. [Invoice ]
The payment date for your invoice was # days ago. To keep in good standing, please pay by end of day.
To make a payment now (and avoid service interruption,) please visit:
Thanks for being a $YOURNAME client!
The next day, they’ll get the still-professional but more terse version…
Subject: Account Alert: Payment reminder for overdue invoice
The payment date for your invoice has past.
To keep $CLIENTBUSINESS in good standing (and avoid service interruption,) please pay now at: $INVOICEURL
Pick-up the phone on that overdue invoice
Let’s say the worst has happened. The invoice is overdue, the client has gone dark, and you need to pay your mortgage. You have to pick up the phone and call. And you need to be cool about it.
Keeping payment reminders all about customer service is tough because you’re emotional. Which is why I don’t do it at all. I have my wife and sometimes virtual assistant, Julie, call for me. She’s always successful because she’s not here to argue about payment. When she calls, she’s completely understanding that…
- the invoice accidentally went into spam.
- Or they thought their assistant paid it last week.
- Or they were on vacation and forgot.
Those are excuses she hears daily. But do you know how she replies to all of them? The same way: “Gosh! I hate when that happens to me! I can take the payment over the phone right now if that’s easiest for you!” She’s thermonuclear nice.
Assuming you don’t have a Julie in your life, you can hire mine as a virtual assistant to call on your overdue invoices at Just Tell Julie. She even has a drip campaign to help you get paid.
Kurt Elster is the Co-Founder & Creative Director of Ethercycle, an ecommerce consultancy helping Shopify stores grow their revenue. He’s also a happy Hiveage customer — check out his interview with us.
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