How to Chase Late Payments Politely: 5 Top Tips

Running a small business means wearing many hats, and unfortunately, chasing down late payments is often one of them.

While it’s crucial for your cash flow, the process can feel like pulling teeth, especially when dealing with repeat customers.

In this article, we’ve set out to show you that a little professionalism and the right approach can go a long way in securing those overdue payments. All without sacrificing your sanity or your business relationships.

Prevention is key

Before you start chasing, let’s talk about preventing late payments in the first place:

• Set clear payment terms: Don’t leave it up for interpretation. Specify your payment due date and accepted payment methods upfront in your invoices.
• Offer multiple payment options: Make it easy for your customers to pay by providing popular payment options like Stripe, PayPal, or even Apple Pay.
• Send invoices promptly: Don’t wait until the last minute! If you’re on Shopify or Bigcommerce, why not try Sufio’s powerful automation features to ensure invoices get sent out immediately after customers make their orders?
• Offer incentives for early payment: For B2B customers, a small discount for paying within a certain timeframe can encourage prompt payments.

A quick note on perceived “rudeness”

It’s totally normal to feel a little awkward asking for payment, but remember: you’re not being rude, you’re simply doing business.

You’ve already provided the customer with a valuable service or product, and it’s only fair that you receive the compensation you deserve.

Freelancers Union reports that the average U.S. freelancer loses $6,000 annually because of unpaid work, cutting their yearly earnings by a staggering 13%.

Keep your head high and think of it as a necessary conversation, not a confrontation.

So, how should you deal with late payments?

Even if you take all the preventative measures, occasional late payments are inevitable. Here are five quick tips on how to handle them gracefully:

• Send a friendly reminder: Start with a polite email or text message to remind the customer they have an overdue invoice. Sufio can help with this!
• Follow up strategically: If the reminder doesn’t work, try a phone call or follow-up email, while also increasing the level of formality.
• Offer solutions: If the customer is facing financial difficulties and you sympathize with them, you can offer options like payment plans or temporary discounts.
• Document everything: Keep a record of all communication and payment attempts.
• Lay out the consequences: For repeat offenders, outline your late payment policy and potential consequences (e.g., suspending accounts, referring to collections).

Remember to be professional and empathetic when sending email reminders or phoning customers. Even when dealing with frustrating situations like late payments, business owners need to maintain an understanding tone because not all customers are intentionally trying to avoid payment.

Send reminders for overdue invoices

Sufio can automatically create and send invoices, credit notes, and reminders.

If you want to increase your chances of getting paid on time, we recommend sending reminders for overdue invoices automatically.

Just install the Sufio app, choose one of our professionally designed invoice templates for Shopify to include a due date, and we’ll use that data to send a gentle reminder to any customer who forgets on time.