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40 politely-worded templates to get invoices paid

7 reasons your invoices are getting paid late and how to avoid them

7 reasons your invoices are getting paid late and how to avoid them

Poor cash flow caused by late payments is one of the most common problems faced by businesses. It can affect the growth, stability, and even survival of a company. Unfortunately, late payments are becoming increasingly common in today's business landscape.

According to Chaser's 2022 Late Payment Report, 87% of businesses have experienced late payments in the past year. In order to try and recover these late payments, businesses waste a further 56.4 million hours per year chasing them. This not only affects the bottom line but also puts unnecessary strain on employees and relationships with clients.

The problem also seems to be worsening, with corporate insolvencies doubling during 2022, and research from Barclays shows that 40% of small and medium businesses reported worsening late payments.

In order to combat this late payment crisis, companies of all scales need to have a firm understanding of why their invoices are getting paid late and a proactive plan to prevent it from happening.

So, if you find yourself wondering 'why am I getting paid late?' on a regular basis, this guide is for you. In this article, we'll explore the seven main reasons why invoices get paid late and provide actionable tips on how to ensure timely payments.

Late payments can jeopardize your business's survival. It's essential to understand why invoices get paid late and take a proactive stance to prevent it from happening.

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Reason 1: Not consistently following up on invoice payments

One of the main problems businesses face when trying to recover late payments is treading the fine line between ensuring their cash flow and keeping valuable customer relationships intact.

Research by Sage shows that as many as 30% of SMBs (small and medium-sized businesses) fail to consistently follow up on unpaid invoices for fear of damaging relationships.

While maintaining good relationships with customers is important, it's essential to remember that consistent follow-ups are necessary in order to get paid on time.

After all, your business depends on timely payments, and customers should understand and respect that. No amount of excellent customer relationships will help if your business goes under due to poor cash flow.

Additionally, there is no reason that, if properly communicated, customers would be offended by a polite reminder for payment. In fact, most customers will appreciate and respect your professionalism in following up on unpaid invoices.

The key to getting paid on time is to employ polite persistence in following up on unpaid invoices. Implementing a clear and consistent follow-up process can help to maintain good relationships while still ensuring timely payments.

How to set up a consistent follow-up process:

  • Establish a clear policy for follow-ups, including how often and in what manner customers can expect to be reminded of unpaid invoices.
  • Use automated reminder systems like Chaser to take the pressure off your employees and ensure consistent communication with customers.
  • Provide an incentive for early payment, such as a small discount or free service. This not only encourages timely payments but also shows appreciation for customers who pay on time.
  • Make sure all communication is polite and professional. Avoid using overly harsh or aggressive language, as this can damage relationships with customers.
  • Keep a record of all communication regarding unpaid invoices, including dates, methods of follow-up, and any agreements made.

Consistency and polite persistence are critical to a successful follow-up process and can help prevent late payments in the future. Taking a proactive approach to following up on unpaid invoices can significantly improve cash flow and overall business success.


Reason 2: Your payment reminders are getting ignored

Even if you do have a consistent follow-up process in place, it's possible that customers are still ignoring your payment reminders.

There could be several reasons for this.

  1. Your reminders may not be getting through to the right person in the company.
  2. The remainder is too vague or generic and doesn't clearly state the amount owed and the due date.
  3. The subject line of the reminder may not be attention-grabbing enough.
  4. The email may end up in the customer's spam or junk folder.

Email remains the primary method of communication for businesses, with 86% of UK businesses using email to communicate with customers. However, emails only have an average open rate of 24%, meaning that a significant portion of your payment reminders may be going unnoticed.

The good news is that there are plenty of proactive steps you can take to ensure your payment reminders are not ignored.


Way to make sure your payment reminders get noticed:

  • First and foremost, make sure you have the correct contact information for the person responsible for payments. Reminder emails sent to a particular person are more likely to be noticed and acted upon, especially if that person is responsible for actioning payments.

  • Use a clear and concise subject line that clearly states the purpose of the email, such as "Reminder for Payment Due on [Date]."

  • Clearly state the amount owed, the due date, and any late fees in your reminder email.

  • Personalize our email by addressing the recipient by name. This adds a personal touch and can make the email feel less generic and automated.

  • Consider using multiple channels to send payment reminders, such as email, phone calls, and even SMS messages. SMS messages have a much higher open rate of 98% and can be an effective way to grab the customer's attention.

  • Ensure your email is not getting marked as spam by regularly checking your sender reputation and avoiding common spam triggers in your email content. These include excessive use of capital letters, spammy words, and too many images or links.

  • Use a professional and friendly tone in your emails. Keep in mind that you are communicating with another human being who may have legitimate reasons for the late payment.

Adopting a multi-channel approach and taking proactive steps to ensure your payment reminders get noticed can significantly improve your chances of getting paid on time.

Remember, the key is to find a balance between ensuring timely payments and maintaining good relationships with customers, so remain polite and professional throughout the process.


Reason 3: You're not making it easy for your customers to pay you

The best way to get paid consistently is to ensure that the payment process is as easy and convenient for your customers as possible.

If the process is too complicated or time-consuming, your customers may delay making payments out of frustration or forget altogether. It's worth remembering that your customer is almost certainly as busy as you are and may not have the time or patience to navigate a complicated payment process.

The most common payment method offered by businesses is bank transfer. However, using a bank transfer can be a time-consuming and tedious process for customers, requiring them to log in to their bank account, manually enter your details, and confirm the payment. It can also take days for the payment to clear on your end, delaying cash flow.

Providing multiple payment options is a way to both ensure better cash flow and demonstrate that you value your customers' time and convenience.


Methods for making it easier for customers to pay:

  • Offer online payment options, such as debit or credit card, PayPal, Switch, or Applepay, which are quicker and more convenient for customers.

  • Use invoicing software that allows you to accept online payments and send automatic payment reminders, making the process more streamlined for both you and your customers.

  • Clearly state all available payment methods on your invoices and any other communication regarding payments. This eliminates confusion and ensures that customers are aware of their options.

  • Use a payment portal that allows customers to log in and make payments easily. This is especially useful for recurring payments.

  • Consider offering payment plans or installment options for larger invoices, making it easier for customers to manage their cash flow and avoid late payments.

Giving your customers multiple payment options not only makes it easier for them to pay but also shows that you value their time and convenience. It's a win-win situation for both parties.


Reason 4: You’re chasing the wrong person for payment

Making sure you have a direct line through to the person responsible for payments is crucial in getting paid on time. If your payment reminders are being sent to the wrong person, then it’s unlikely that they’ll be actioned.

Emails get lost in the churn of an overflowing inbox and are often deleted if the recipient doesn’t recognize the sender or know what the email is in relation to. If you’re not successfully contacting someone directly responsible for payments, then paying your invoices on time will be challenging.

There's a good chance that the person you are selling to isn't the one responsible for processing payments. In larger companies, invoices may need to go through multiple departments before they reach the person in charge of making payments. Therefore, it's essential to do your research and find the right contact person to chase for a late invoice.

How to make sure your payment reminders reach the right person:

  • During the onboarding process with new customers, make sure to ask who is responsible for payments and their contact information. It’s also a good idea to get the contact details of someone senior to them in case there are issues with payment.

  • If you’re still unsure who is responsible for payments, try calling the company and asking directly. This can also help build a personal connection and make future communication more accessible.

  • Utilize social media platforms like LinkedIn to research and identify the person responsible for payments. You can also use these platforms to connect with them and establish a professional relationship.

  • Regularly update your contact information and keep track of any changes in the company structure or personnel. This can help ensure that your payment reminders are being sent to the right person.

Making sure you have a direct line of communication with the person responsible for payments is crucial to getting paid on time. By personalizing your emails, providing multiple payment options, and ensuring that your reminders are reaching the right person, you can increase your chances of receiving timely payments and maintaining a healthy cash flow for your business.


Reason 5: Your invoices are unclear

The most easy fix in this list, ensuring that your invoices are clear and easy to understand, can make a significant difference in getting paid on time.

Invoices that are confusing or incomplete may lead to delays in payment, as customers may have trouble understanding what they're being charged for or how to make the payment.

Ensuring your invoices are mistake-free and detailed enough to explain the services or products provided will help avoid any confusion and speed up the payment process.


7 things you need to include for a perfect invoice:


  1. Your business name and contact information - This includes your company logo, address, phone number, and email.

  2. Customer's name and contact information - Make sure to include the customer's full name, address, phone number, and email address.

  3. Invoice number and date - Each invoice should have a unique identification number for tracking purposes.

  4. Detailed description of the products or services provided - This should include quantity, price per unit, and any applicable taxes.

  5. Payment due date - Clearly state when payment is expected to be made.

  6. Payment methods accepted - List all available payment options, including any associated fees.

  7. Terms and conditions - Include any relevant policies or terms of service that the customer should be aware of.

By ensuring your invoices are easy to understand and contain all necessary information, you can reduce confusion and increase the likelihood of timely payments. Additionally, consider using invoicing software that automates this process and ensures consistent, error-free invoices.


Reason 6: Customer queries are holding up payments

Connected to the point above, unclear invoices, as well as other inconsistencies and errors, can also lead to customer queries and delays in payment. Customers may have questions or concerns about the products or services provided, which can delay the payment process.

Dealing with customer queries is a time-consuming and potentially frustrating task, but it's crucial to address them promptly in order to avoid any payment delays.

To avoid this problem, make sure to have a clear and straightforward way for customers to contact you with any queries they may have. This could be through email, phone, or even a dedicated customer service portal.

Having a consistent policy in place for dealing with customer queries can also help streamline the process and ensure that any issues are addressed promptly. All staff members who may interact with customers should be trained in handling queries and have a clear understanding of the company's policies.

How to handle customer queries effectively:

  • Respond to queries promptly and professionally, even if it's just to acknowledge that you've received the query and are working on a response.

  • Have a comprehensive credit control policy in place that outlines how customer queries will be handled and resolved.

  • Keep a record of all customer queries and their resolutions for future reference. This can also help identify any recurring issues that may need to be addressed.

  • Make use of customer statements or a payment portal to ensure customers have easy access to all their invoices and payment history, reducing the likelihood of queries.

  • Ensure all staff members have access to accurate information about your products or services so they can answer any specific questions from customers.

  • Use software tools like CRM systems or helpdesk platforms to manage and track customer queries efficiently.

  • Regularly review and update your FAQs or help resources to address common questions and prevent recurring queries.


Making sure customer queries are handled promptly and efficiently can help avoid any delays in payment and maintain a good relationship with your customers. It's crucial to have a clear credit control policy in place and ensure that all staff members are trained and equipped to handle customer queries effectively.


Reason 7: Your customer has cash flow issues

So far, we've concentrated on how cash flow issues impact your business, but it's also important to consider that your customers may be facing cash flow issues of their own. This can cause delays in payment, even if they are satisfied with your products or services.

The reality is that 9 out of 10 small businesses are currently facing cash flow issues, which can trickle down to affect their suppliers and partners as well. In addition, the number of late payments has increased by a crushing 46% since 2019.

Your customer might not be able to make payment for precisely the same reason you are chasing them in the first place. Offering flexible payment terms and negotiating a payment plan can help alleviate some of the financial pressure your customers may be facing. This not only helps you get paid, but it also shows that you understand and empathize with their situation.

Additionally, regularly communicating with your customers and understanding their financial situation can help identify potential payment issues early on. This allows you to take proactive steps to minimize any impact on your business.

For example, regular credit checks can also help give you insight into your customer's financial health and identify any potential issues before they become major problems.

Tracking your customer's payment behavior is another valuable tool in this scenario. If you notice a pattern of late payments or missed deadlines, it could be a sign that your customer is struggling with their cash flow. In such cases, it's essential to have open and honest communication to find a mutually beneficial solution.


Ways to navigate customer cash flow issues:


  • Offer flexible payment terms, such as installment plans or extended due dates.

  • Negotiate a payment plan that works for both parties.

  • Regularly communicate with customers and understand their financial situation to identify any potential issues early on.

  • Conduct credit checks and track payment behavior to gain insight into your customer's financial health.

  • Consider offering discounts for early or on-time payments to encourage timely payments

The bottom line is that understanding and addressing your customer's cash flow issues can not only help you get paid but also strengthen your relationship with them. By showing empathy and offering solutions, you can navigate payment delays caused by their financial struggles.

Don't shy away from having those tough conversations with your customers about their cash flow issues, and work towards finding a solution that benefits all parties.


Credit control webinars from Chaser



The tips and strategies mentioned in this document are just the tip of the iceberg when it comes to effective credit control. To delve deeper into this topic, Chaser regularly hosts webinars on various aspects of credit control.

Check out the full video of the webinar on this topic, "WHY YOU KEEP GETTING PAID LATE: The 7 reasons your invoices are getting paid late and how to avoid them," and sign up for upcoming webinars to stay on top of the latest techniques and best practices for credit control.


Tackling the late payment crisis head-on

Given the scale of the late payment crisis and its impact on businesses, taking a proactive stance to improve your credit control process is crucial.

This includes having clear payment terms, regularly communicating with customers, and implementing effective credit control policies. It also involves identifying potential issues early on and taking proactive steps to address them, whether it's through flexible payment options or understanding your customer's cash flow challenges.

By prioritizing effective credit control practices, you can improve your cash flow and maintain healthy relationships with your customers.

The seven steps above provide a framework for businesses of all sizes to strengthen their credit control process and reduce the impact of late payments. Ultimately, it's about taking control of your finances and ensuring that you get paid on time for the products or services you provide, enabling your business to thrive.

For more information on how to improve your credit control process, visit the Chaser blog for access to helpful resources and tips from experienced credit professionals.

To learn more about how Chaser can help you streamline credit control and get paid faster, schedule a demo with one of Chaser's experts today or start your 14-day free trial to experience the benefits firsthand.

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