5 min read
What timing should I set on payment reminders?
Oh, no! It seems your customer forgot to make their payment on time again. There are few things as nail-biting as when your business misses out on a timely important payment. After all, you already have enough to worry about without having to stress over the problems that arise from late payments.
That being said, you're also too busy to be remembering every single detail while simultaneously running and building your business. So what are you supposed to do?
For people in your shoes, formalising your invoicing process, and exploring automated payment solutions can be a life saver. This article offers tips to help you get the payments you need on time, every time. Keep reading to learn more!
Make sure your invoice has all the right information
One of the easiest ways for late payments to happen is because of an unclear invoice. If your payment instructions aren't clear, your customers can easily be confused by the payment terms and process.
Since you're dealing with people of all ages and backgrounds, you have to make sure you can accommodate everyone by creating a professional invoice to make payments as easy and as effortless as possible.
The first thing you'll want to do is include relevant information about the invoice - important matters like your company's name, the customer’s order, the total account balance, and the payment history.
Next, you'll want to tell the customer how they can pay you. State the payment methods that you accept, and if you offer an online method, make sure to highlight this method and showcase how easy it is so your customers can pay you quicker.
Know when to follow up on unpaid invoices
One of the biggest reasons payees say they forget their payments is that they don't receive a reminder about their payments. With this in mind, it's important that you send out payment reminders so your customers are informed ahead of the due date.
In general, it's best to send out a payment reminder around two to three days before the invoice is due. By reminding your customers earlier about their payments, you're less likely to need to follow up with handling late payments.
However, if the invoices still go past due, you'll want to follow up with them. Make sure to prompt your customer with a message in a friendly manner after a few business days have passed, giving them extra time after the due date in case the payment has actually been sent and is taking time to process.
Of course, you'll want to take care of the oldest debts first, following up with those invoices as a priority over others.
Try different ways to remind them
If you catch yourself writing out lengthy reminders, we can tell you that you aren't alone. In fact, many business owners find themselves believing that sending a long message makes them look professional and provides the payee with the information they need for their invoice.
The truth is, a long email does the opposite. It can make you appear hostile and puts strain on your relationship with the customer. Instead of focusing on length, you should be thinking about being direct and concise. Here are some things you can try if payment hasn't been received:
Deliver a final reminder: Final warnings tend to help most customers pay what they owe to the business. Remember to keep things brief and only mention the important details.
Send a statement of unpaid invoices: When payees see the amount they owe, they usually tend to pay faster to stay in good graces.
Call them: You can't get much more direct than calling the customer about their overdue payments. Directly speaking to your customer is a great way to influence them to pay what they owe.
Charge a late payment fee: If you don't care for the hassle of following up your customers for payment, you can passively convince them to pay by charging late fees whenever they're past due on their invoices. Just make sure you discuss late fees as part of your payment terms when you start doing business with them.
As your business grows and you acquire more customers, you'll find yourself starting to spend more time writing out payment reminders. This will end up taking a greater portion of your time until eventually, it will seem like that's all you do.
The last thing you need is to waste your precious hours doing something that can already be taken care of for you automatically.
Improve your business cash flow with an automated payment solution
This is where an automated payment solution like Direct Debit can help save you time, with unrivalled flexibility and control of payment type, amount (set or variable) and frequency. Your business cash flow will improve as your larger invoices are split into bite sized payments, with more regular income for your services. For your customers, managing regular and recurring bills becomes easier as they have personalised payment schedules that work for both them and your business. The set-and-forget nature of this payment solution means you will get more time back in your day to spend doing what you love.
You’re able to easily take care of any failed payments by setting up a program to reach out to your customers on your behalf. It can even send out messages via SMS or email to a select group of your customers at once. Plus, with Ezidebit’s Direct Debit automated payment reminders, you can remind your customers of an upcoming debit without ever having to send a personal email.
The mental and physical energy used, as well as the time spent, are brought to a minimum when you use an automated payment solution like Ezidebit’s Direct Debit. Furthermore, with detailed customer and payment reporting, keeping track of your payments has never been easier.
For the help that you deserve
Now you know that there are plenty of ways that you can improve your cash flow while you grow your business. That said, there's nothing better than having professional help when you're navigating the nuances of financial payments. We're here to lend a hand.
At Ezidebit, we know how important your money really is to you, and we're here to help you manage it to the best of your ability to produce optimal results for your business.
Ready to get started? Take a look around our site to find out about all of the different services we have to offer you, and make sure to reach out to us whenever you're ready to manage your payments and stay on top of your business. We look forward to helping you succeed!