Email is an incredibly effective tool for credit control. Here at Chaser, we’ve seen that...
10 email templates to get late-paying customers to pay invoices
How often do your customers have an outstanding payment or pay their invoices late Or if you’re an accountant or bookkeeper, how often do your clients get paid late by their customers? Xero took a look at their data and discovered that 52% of invoices were paid late. The real concern, though, is the knock-on effect this has on businesses. Research from The Federation of Small Businesses uncovered that in the UK, 50,000 small business failures could be prevented each year by eliminating late payment.
Here at Chaser, chasing up payment is our speciality. We’ve been refining our payment-chasing email templates for several years, to produce what we believe are the most effective to get paid on time. Chaser users get those email templates built-in to their account so they can automatically chase all of their customers with best practice templates (you can try out automated chasing for free, for 14 days here).
But while these are a one-size-fits-most solution, they aren’t one-size-fits-all. For those times when you or your clients have bad-paying customers that are a nightmare to get payment from, we’ve assembled the best practice email templates to use, and sending schedule to follow, below.
To see our tried and tested PDF guide on ‘What to do when customers aren’t paying’, which goes hand-in-hand with our late payment templates, use a perfect solution for outstanding payments just click here.
Chasing up bad payers
The definition of what’s considered to be a ‘bad payer’ is something that can drastically differ depending on who you ask.
If customer invoices are regularly becoming late overdue, it may be worthwhile distinguishing your business' bad payers. As follow ups can be adjusted accordingly for each group, to maximise your chance of prompt payments.
The short of it is: most bad-paying customers are simply those that have built a reputation for paying past the invoice due date. If you were already expecting a customer to miss the due date of an invoice before it rolled around, that’s a classic example of a bad payer. In general, chasing bad payers via email requires more focus on firmness and specificity, doing away with casualness and pleasantries (without being rude, of course). You also want to keep on top of bad payers more frequently than other customers.
Below is our recommended email sending schedule for bad payers. This schedule is optimised for businesses that sell on 30 day payment terms. For shorter or longer payment terms, we’ve noted adjustments below.
- 32 days before due - Confirm contact and invoice details
- Shorter / longer terms: Send 2 days before issuing invoice
- 30 days before due - Invoice issued
- Shorter / longer terms: Send the number of days before due as per terms
- 21 days before due - First payment date confirmation
- Shorter terms: Send halfway between issuing invoice and due date
- Longer terms: Send a quarter of the way between issuing invoice and due date
- 14 days before due - Second payment date confirmation
- Shorter terms: Do not send
- Longer terms: Send halfway between issuing invoice and due date
- 7 days before due - Payment date not confirmed
- Shorter terms: Send 2 days before due date
- Longer terms: Send three-quarters of the way between issuing invoice and due date
Every business will have those few tricky customers where email reminders aren’t working, you can see our best practise guide on ‘What to do when customers aren’t paying’, just click here . You can help your business avoid bad payers in the first place, by asking these 4 key questions to all new customers.
--- Invoice due date ---
- 1 day overdue - Invoice overdue, penalty reminder
- 7 days overdue - Invoice overdue, penalty notice deadline set
- 14 days overdue - Penalty notice issued, court proceedings raised
- 21 days overdue - Court order deadline set for 7 days
- 28 days overdue - Court order drafted and submitted
It sucks, but have a plan for non-payment
The above email templates and sending schedule are, in a generalised sense, the best practice approach you can have to get invoices paid on time by bad-paying customers. The unfortunate reality is that credit control is a process where you can only control the inputs. Even if you do the best you can, it doesn’t guarantee every customer will pay on time.
For the (very small) minority of cases where the above templates do not result in the invoice getting paid, don't simply write these off as bad debts, there are a whole host of options you can take, all outlined in our free guide ‘What to do when customers aren’t paying’.
How to prevent late payment in future
For bad-paying customers, stick to the templates and schedule laid out above in this post. In the majority of cases, payment will be collected on the invoice without having to proceed with late payment penalties or court proceedings.
But it’s not all doom and gloom. It’s possible to turn bad-paying customers into superstars. We wrote a blog post detailing the one thing that needs to be done, and done regularly, to eventually transform them into good-payers. Give it a try.
For best practice guidance on how to optimise your business' credit control function, see our Ultimate Guide to Accounts Receivable blog. Covering everything from the fundamental cornerstones of your AR procedure, when, how and why to conduct credit checks and distinguishing good and bad payers.
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