October 5, 2024

9 Tips for Following Up With Clients Who Are Behind on Payments

The ideal clients present an opportunity to leverage your expertise in exchange for fair compensation for your work. No matter how robust your vetting process may be, the odds are good that getting paid will become a problem. An understanding of tone, delivery, and intent will help close payment gaps and improve your valuable client relationships. Expand your business acumen and learn how to gracefully nudge non-paying clients along without burning bridges.

1. Automate Billing Reminders and Escalations

Build a foundation that makes getting paid automatic by using accounting software for invoicing. Plug in your existing payment terms in alignment with your client agreements and automate reminders for upcoming and past-due invoices

For clients who are behind on payments, use escalations in your invoice design to express their importance and urgency. Offer a range of payment options to make it easy for clients to pay, including by card. In some cases, card payments are easier to execute versus checks, which may be the source of late payments.

2. Establish a Friendly, Personalized Cadence of Communication

No matter the end product or service you provide, you’re in the relationship business. Invest in establishing good rapport with your clients throughout your engagement to help improve communication flows.

Regularly check in with clients throughout the month to get a pulse on how they’re doing and how you can support them. Touch on business, but ask for an update on how that last vacation was or their kids’ soccer championship. When it’s time to ask about their past-due payment, the communication channel will already be open.

3. Be Clear and Direct

You don’t have time to beat around the bush, but there’s a balance to strike when it comes to money. Focus on being clear and direct with your question while always assuming positive intent. There may be good or understandable reasons why they’re behind on payments, and a friendly reminder may be welcome.

Your account contact may not be the one responsible for submitting payments and your straightforward email follow-up moves things along. Offer reasoning behind your message, like you’re finishing up the month’s accounting or reviewing your favorite accounts.

4. Use Multiple Channels to Get the Message Across

There are inbox zero people and there are those whose inboxes should be flagged for hoarder status. Your client may not sync with your invoicing channel, so it’s important to consider their channel of choice.

If your accounting software automates billing, ensure the recipient details mesh with the right contact with your client. Implement a paper billing reminder for invoices past due for a set number of days, which can make their way to a CFO’s desk with the right address block. Finally, a phone call follow-up to your client’s accounting team can provide an earnest nudge to the folks empowered to close out the invoice.

5. Offer Options to True Up Accounts

Flexibility is a type of grace that’s always appreciated, and extending it to your clients gives them an empathetic out. Being behind on payments can feel embarrassing, even if it’s an honest mistake. By providing your clients options, you’re giving them the benefit of the doubt and increasing your chances of getting paid.

Use your invoicing software to update payment type options, break up the payment amount, or extend the terms. These options can be combined or paired to extend flexibility to your clients now or long term.

6. Show Up for an Impromptu Visit

An unscheduled pop-in mustn’t feel like a scene out of a mobster flick, but it can be just as effective. Stop by with a good story, an office-wide treat, or a work-related win for your clients with a welcome desk. A box of doughnuts is always a hit and your presence on-site needn’t come with an invoice reminder.

By showing up in person and with a positive reason for being there, your lingering invoice comes to mind naturally. If baked goods aren’t your thing, bring the latest campaign metrics deck in a nice folder or hardcopy proofs for their review.

7. Express Empathy and Understanding

Kindness wins in business and life, so make leading with empathy your primary objective. Be soft with your delivery and aim to connect with the person on the other side before you begin business. View them as people first, rather than an outstanding bill.

Ask, “What deliverables can we help you with?” and “What’s your biggest stress these days?” Next, just listen and wait for their response and keep them talking. Things may be tough at home, the business may be in trouble, and late payments are just the red flag.

8. Escalate the Reach of Your Reminders

A carbon copy of an email is the professional equivalent of sending a note home to one’s parents in grade school. When your other efforts fall short, escalating late invoices is a useful and often effective next step toward truing up accounts. Include a copy of your invoice to a kind and direct email check-in to your primary contact and key leadership.

This will place your reminder in front of the people who can speed up payments. If there’s an issue brewing, their response or lack thereof can inform you of what you need to do next. If there’s a clear chain of command, you might try this more than once, adding extra CC’s as you do.

9. Level-Set On Expectations and Commitments

Once you’ve exhausted other options, it’s time to recenter and re-clarify your business agreement with your non-paying clients. Schedule a more formal conversation with your primary contact, leadership, and even finance or legal team to review your contract. Offer options for restructuring or even ending the contract if the agreement is unsalvageable, with the condition of payment in full for work delivered.

In some cases, a monthly retainer helps flatten their operating costs better than variable invoicing. Here, you gain income predictability and an automated collections process that ensures your client relationship is in good standing.

Focus on Value and Mutual Respect

Use persuasive communication techniques to move the conversation forward. Ask, “On a scale of 1-10, how happy are you with our work?” They’ll be compelled to respond with their level of satisfaction and come up with their realization of your value-add. By forcing them to place value on your work, they’ll be more motivated to true up your account. Be patient as you work through this process, extending grace and understanding while respecting the value of your work.

About the author 

Kyrie Mattos


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