Steps To Take When You Need To Collect An Unpaid Invoice

If your company implements an invoicing system, you’ve probably experienced at least one unpaid invoice. Maybe the client misplaced the invoice, was unsatisfied with your service, ran out of money, or intentionally chose not to pay. Because an unpaid invoice affects your cash flow, take these steps to collect the money you’re owed.

Send Multiple Invoices Immediately

As soon as you finish the work, send the invoice via email, snail mail and in person if possible. Multiple invoices reduce the excuse of lost paperwork and show your client that you’re serious about getting paid.

Also, don’t get distracted or forget to send an invoice. Clients are more likely to pay an invoice for presentation prep, plumbing or catering services they received recently, and you’ll feel embarrassed if you ask a client to pay an invoice you never sent.

Communicate with the Client

An honest talk can give you insight into why the client hasn’t paid yet. Maybe they were unsatisfied with the work you did or had an emergency and forgot to pay. Use this information to determine if you should offer to fix the problem, discount the final bill or make other arrangements to receive your payment and protect your relationship.

Follow Up

Every invoice should include a due date, and you will want to follow up with the client and other key employees of the company if the invoice remains unpaid. A firm but friendly email or phone call reminder may prompt the client to send payment immediately. However, if the client still doesn’t pay, remain consistent and keep in touch every day. You can even send an updated invoice to ensure the client has the current balance.

Remain Civil

While you do need to receive payment, remain kind, friendly and professional. Don’t lose your cool or curse at the client as you communicate with them, and don’t blast the client on social media. Your civility showcases your professionalism and improves the chances that your client will take your calls rather than avoid your attempts to get paid.

Seek an Equitable Resolution

Even though the client can’t pay, you may be able to compromise. Perhaps a payment plan or a discount on the invoice total will help you resolve the problem as civilly as possible.

Stop Services

Refuse to complete additional video editing, construction or consulting work until the invoice is paid. This firm stance may prompt your client to pay in full rather than find someone else to finish the project.

Hire a Collection Agency

A collection agency that specializes in recovering unpaid invoices can take over this bill on your behalf. You’ll owe the agency a percentage of the money they collect in exchange for less hassle.

Contact a Lawyer

Your lawyer can review your contract, invoice and collections documentation to determine if you have a case. He or she will then advise you on what steps to take next.

Send a Certified Letter

Sometimes, the client will pay after receiving a certified letter from the attorney. It can threaten further legal action and include the original proposal and contract that show exactly how much money is owed.

Weigh the Costs

The efforts you take to get paid may outweigh the cost of the unpaid invoice. Be sure you don’t spend more in collections or attorney fees than you would gain from the payment.

Change your Future Billing Practices

Learn from this mistake and change the way you bill clients in the future. These changes may not prevent unpaid invoices, but they can reduce this risk.

Require a retainer or portion of the fee upfront before you begin work on the branded app, commissioned artwork or marketing campaign.

Divide the balance into equal parts due at intervals throughout the project.

Send an invoice at each interval and stop work until that invoice is paid in full.

Specify a payment schedule that includes late fees and any legal action you will take on unpaid invoices.

Revamp your Contract

Include specific details of the work you will do and your expected payment schedule in the contract. Try to make the contract and deliverables schedule as accurate as possible, too, so the client avoids surprises and has fewer reasons to contest the invoice.Your business depends on clients paying their bill on time. If you do experience an unpaid invoice, though, take these steps to recover payment.