How To Talk to Clients with Unpaid Invoices
There’s always going to be a client who doesn’t pay their invoice. Some clients are unable to pay their invoices and some just refuse to even if they can. If you ignore the hole of debt your client digs at your company, it’s likely they will keep digging and that amount will increase. Who should be the person to contact them about the debt? Should you wait until they’ve racked enough debt to have your commercial collection agency handle communication? If you decide to reach out, do you know what to say? This article provides tips on how to talk to clients who have unpaid invoices.
Ask Specific & Direct Questions
Expect that your client won’t enjoy talking about their unpaid invoice to you; so avoid common yes or no questions. Only ask questions that will encourage your client to answer with explanations as to why they’re not paying their invoices.
Here are some good questions to ask:
- Who is in charge of paying invoices with you?
- Why are you having trouble getting the payment in on time?
- When will your customers pay you?
- When will you have your finances in order to pay the invoice?
- What’s the latest we can expect a payment from you?
How well are you prepared for your client call? It’s important to have a cooperative dialogue with your client to get the most information about why they’re not paying you and to determine a solution to the problem. You don’t know what kind of answers or excuses your client will give, so it’s good to plan the conversation ahead of time. Since you will be initiating the conversation, you will have ample time to prepare. Just be sure to have the conversation within 1–3 days from the original invoice deadline. If the client continues to ignore the invoice deadlines, continue to work with them or consider contacting a commercial collection agency.
Document the Conversation
Be sure to take notes and document everything that your client says in your conversations, and letting them know that you are. This will help cement the solution that you come to during the conversations. Your client has ignored your rules of paying invoices; you need to make sure they know you are serious with your goals. If you decide to record the conversation, remember that under federal law you need to inform the client at the beginning of the call that you’re recording the conversation (DMLP.org).
Once you’ve determined a new payment plan or deadline with your client, write down that information and let them know that you will be following up with them. This is also a good opportunity to verify any contact information you have of theirs (e.g. phone number, address, email), so that you can contact them with the invoice deadline or if you need to pass the invoice along to a commercial collection agency.
Follow Up After the Conversation
After you’ve had a conversation with your client and established a payment plan/deadline, it’s important to follow up with your client. This will help ensure they stick with the established solution you made in your conversation. The follow-up call or message should occur before the new payment deadline. If they still miss all the deadlines you’ve established in your conversations, you should consider sending the unpaid invoice case to a commercial collection agency.
For more information on the process of hiring a commercial collection agency, read our blog post: When a Business Hires a Collection Agency.