It is best practice to stop late payment happening in the first place with a robust credit control process. Checking the creditworthiness of a customer and getting your invoice right are essential elements of good cash flow management.
Once you start chasing unpaid bills, though, a certain level of discretion is needed to get the best result. You want payment, but the customer may be one you do not want to alienate — and there is an understandably fine line between a fair, acceptable request for payment and what the customer might perceive as harassment.
You value them because they have dealt with you before, perhaps regularly, and proved reasonable and prompt. This delay may be a blip that never recurs. Equally, you need them to know that failing to pay you matters; otherwise it sets a precedent in the relationship that is difficult to overcome.
Be understanding
Give the customer the opportunity to explain why payment has not been made. Call or write as a reminder, or as a courtesy to ask what they thought of your service and whether they have any queries. A neutral tone works best: they may simply have mislaid the invoice and will pay in full once they realise.
In some cases it is right to offer extended credit, assuming they are creditworthy, or instalments if they are having cash flow problems. There is nothing wrong with that, as long as you make clear it is a one-off.
Does the non-payment stem from your service?
The customer may not have paid because of an issue with your service. If so, work with them to resolve it. Where the fault was yours, a credit or a scheduled delay in payment can keep terms good. Where the issue has nothing to do with your service, you may have to take a harder line.
Keep records of all communication
Disputes turn into “he said, she said” quickly. Prove what was agreed with paperwork specifying every relevant term, condition and deadline. It shows you are within your rights to ask for payment, and that you can take further action under late payment legislation. If you can show the customer was aware of that information — by including it on the invoice — your position strengthens and theirs weakens.
As long as your communications stay fair but firm, and you keep emphasising the relationship you have both enjoyed, it should only be unreasonable behaviour on the customer’s side that takes the case to court.
