Category: Overdue Invoice Advice

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Time To Threaten Debt Collection or Court Action?

Does this sound familiar?

  • You’ve been demanding payment via email/phone/txt for months now and you’re sick of asking?
  • Is the money not important to you anymore, you just want to teach this scumbag a lesson?
  • On the odd occasion they do respond to your messages they say “the money is on the way” but it never arrives?
  • You have been thinking about threatening debt collection and maybe even court action?

squeaky-wheelYou’ve heard the saying “the squeaky wheel gets the grease”?

In this case, it means that being persistent and annoying gets attention and action.

But have you heard the saying “the angry wheel gets replaced”?

You must keep all your contact with the person who owes you money either neutral or friendly. You can whinge and moan about them all you like to your friends (if they can stand it), but don’t let any anger show through in your messages to your client.

Humans are very receptive to other peoples emotions.

  • The best way to cheer up a glum friend is to have fun with them and be happy around them
  • The best way to make a sitcom audience think the show is funny is to play canned laughter after every joke
  • The best way to ensure you never get paid is to let the person who owes you money just how angry you are.

It makes them angry, indignant, prideful and attacks their self-esteem.

It hurts.

And the way to hurt you back is to continue to withhold your money from you.

So keep your cool, and just ask for your money in a civil, friendly tone.

Being annoying and persistent is absolutely fine. Be that squeaky wheel. They will be motivated to get rid of an annoyance by paying you what you’re owed.

Being angry, will only hurt their feelings and make them angry. They’ll hurt you back by not paying.

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“Should I Hire A Debt Collection Agency?”

old-lady-collection-agencyAre you wondering if you should hire a debt collection agency to collect an overdue payment on your behalf?

Don’t bother.

You may like to think they have magical abilities to reach into your x-clients bank account and withdraw funds, but not even the government has the power to do that.

Collection Agencies use the same techniques you can use yourself:

  • Emails
  • Phonecalls
  • Official looking letters
  • Persistence

So save yourself the fees (often 25% – 50% of what they will collect for you), and follow this simple process for getting overdue invoices paid.

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Chasing Unpaid Invoices? Don’t Make These 3 Mistakes

3-mistakesChasing unpaid invoices is a delicate business.

Do it the right way, and you get paid what you’re owed. Yay!

Do it the wrong way and you’ll ruin opportunities for future business. Boo!

Consequences Of Demanding Payment For Overdue Invoices The Wrong Way

  1. You might annoy customers enough that they switch to one of your competitors. That’s lost future income for you.
  2. A client that is a huge fan of yours right now may stop singing your praises if they were forgetful once and you racked them through the coals with your angry demands for payment.

3 Mistakes Not To Make When Chasing Unpaid Invoices

1. Never stamp your statements with an OVERDUE! stamp before you send them out.

2. Never assume they have received any of your reminders so far.

  • If you do assume they have seen your payment reminders you will get angry and your resentment will build up and up with every message you send.
  • Bad idea.
  • Consider the slate clear with every communication.
  • That way, your tone will be light and cheerful instead of dark and sinister

3. Never let 30 days or 60 days go by without you taking any action at all.

  • Train your clients on your expectations by acting fast when invoices are overdue only by a few days.
  • If you let it slide 30 or 60 days you are teaching them (and yourself) bad habits
  • As soon as you notice an overdue invoice, take action that instant

What Do You Think?

What other mistakes have you made in the past, or heard about, that you can share in the comments below?

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Should You Threaten To Charge Interest On Overdue Invoices?

Who do you think you are? A bank?

Leave the interest charging game to the banks.

Charging interest on overdue invoices gives your clients 2 choices:

  1. Pay the invoice
  2. Not pay the invoice (and start accumulating interest which they are pretty sure they can weasel out of with a phone call I they can be bothered)

Why give them 2 choices when you really want them to only take option 1 to save you (and them) all the extra hassle?

Focus on your goal: To get paid.

Charging interest on overdue invoices is a distraction from that goal.

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Automated Payment Reminders: Useful For Getting Late Invoices Paid?

Take a moment to picture your email inbox in your mind and imagine 10 or so unopened emails.

Now take a moment to consider the order in which you will open them.

Does the following order look about right?:

  1. Emails from people you know
  2. Emails from people you don’t know
  3. Emails from robots (email newsletters, automated emails)

The problem with automated payment reminders is that they are easy to identify as belonging in the 3rd category. And since it’s clear that there isn’t another person on the other end awaiting a response, they are also easy to ignore and/or trash.

friendly-robotTell-tale signs of an automated email:

  • The “from” field is not a persons name but a department or brand instead
  • The “via” field is routed through a 3rd party email provider
  • The language and tone of the body of the email is more formal than normal emails written by people
  • There is no email signature from a real person at the bottom of the email

To increase the chances of getting those late invoices paid, all you have to do is dump the automated reminders in favour of the personal touch.

 

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Issue Invoices Sooner To Get Paid Sooner. Obvious?

Do you invoice at the end of the month?

Yes?

So you’re telling me that work you do on the 1st of the month gets invoiced on the 30th of the month and you ask for payment by the 20th of the following month?

That’s 50 days that money you are owed is in someone elses bank account.

And longer if that invoice is paid late of course.

It’s no wonder you have cash flow problems.

How about invoicing as you complete the work and have the invoice due within 7 days?

That would be 7 days before getting paid instead of 50.

Sound good?

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Own An Overdue Stamp? Throw It Away Today You Silly Goose

overdue-stamp

If you own an overdue stamp then I have good news for you because today you are going to free up that drawer space or deskspace for something else.

By the end of this short article you are going to throw it in the trash because you won’t need it anymore.

First, imagine yourself as an accounts payable clerk sitting quietly at your desk with a pile of email or mail in front of you.

You open the first envelope/email and the document has a big red “OVERDUE” stamp that is shouting at you.

You feel like you were just slapped in the face with a wet fish.

Is that anyway to treat the person who is going to pay you?

It is a deep insult. It is shouting out “You are crap at your job! Paying invoices is easy but somehow you screwed it up! Wow, you really suck!”

That’s a great way to get your invoice shoved to the bottom of the pile because that’s their way of asserting their control over you after you insulted them. They don’t expect to hear from you for another 30 days anyway.

What you really want is for that invoice to be paid, right?

Using an overdue stamp will not help you achieve that goal.

So throw away your “OVERDUE” stamp now and find out how to get late invoices paid.