29% of self-employed bills are paid by a defaulting customer. A late or overdue invoice causes all sorts of problems, such as:
- Liquidity problems when income is insufficient
- Loss of time due to additional payment requests
- Emotional and mental stress due to fear.
- Strained relationship with customers.
One of the most common challenges freelancers face is getting paid. We want to help. In this article we will show you three things:
- What to include when applying for payment professionally?
- How to kindly email a customer for payment.
- Your options for handling overdue invoices.
Every industry has an etiquette when it comes to email communication, and freelancers are no different. It's a great skill to learn and can be useful for improving no matter where you are in your career, whether you're trying to get paid or sharing a delivery.
Before we get into what happens when a customer is late with a payment, it's important to talk about how to request a payment. Your invoice should be professional, clear and easily accessible, contain all relevant information including addressed to the right person and not generically sent to the wrong person or department. Invoicing can be a tricky process, especially if you are new to freelance work. Lucky for you, Indy has onebilling toolthat might help you. You can even try it for free with just a click or two!
But suppose that despite your perfect bill, a customer still hasn't paid you on time and your bill is several weeks late. What can you do without stepping on tiptoe, losing a customer, or delaying a payment even further?
Do you have questions about the payment request?
Let's make it easy for ourselves! Use Indy's message templates to simplify communication with customers.
But first, why is money such a taboo subject?
It's no secret that people don't like to talk about money. Even at a time when people are willing to discuss almost anything online, the subject of money can still be taboo, and many people have learned that financial information must remain private.
However, it is a topic that needs to be discussed as our whole life is connected with the concept of money. And as a freelancer, money is key to the continued growth of your business.
While we don't like to think about it, there's a chance at some point in your career you'll need to ask a client about an overdue bill. So what can we do to facilitate this process?
We can overcome these fears by analyzing the reasons behind our worries:
- Sounds rude/aggressive:As a freelancer, we worry that our clients will think we're being rude if we ask about a late payment. And the last thing we want is for our customers to think we're being rude. It took a lot of work to get this client, so we were reluctant to request payment for fear of losing them.
- Fear of confrontation:We often try to imagine worst-case scenarios in our heads. What if this turns into an argument? What if they say no? What if I don't know how to handle the situation? However, it is more likely that your client was busy and missed the deadline. Our worst fears often go unfulfilled.
- Not knowing which approach is best:This is another big reason why freelancers don't confront clients about late payments. Addressing this sensitive topic can be difficult. But no worry! We'll show you how to request payment in a moment.
By addressing the source of our worries, we can now think of solutions that can help us break through that mental barrier.
Here are some tips on how to overcome the fear of cashing out:
- Know that you are not alone:Unfortunately, this is one of the sad realities of freelancing, and many other freelancers have been in your position (and were nervous to ask, too). However, most freelancers would say they were glad.
- Rate your work:Know that you have done valuable work for your client and that you deserve to be paid for your efforts. You've delayed your part of the contract, so don't be afraid to ask your client to stick with their part.
- Send the email:Sometimes we just need to make the jump by sending the email. We will always be nervous about dealing with an issue until we try. But if you've dealt with it, you'll know exactly what to do if it happens again.
We often find that the things we initially worried about weren't so bad after we experienced them. The more often you request payment, the easier the process becomes for you and you will quickly develop a simple system for collecting late payments.
Don't panic if the expiration date has passed.
If your client's payment is overdue, don't worry, especially if you've already worked with that client. Every time your customer pays you, it builds trust and makes you less worried about being scammed.
If this is your first time working with them, don't jump to the worst-case scenario and wonder how you're going to pay your rent with an overdue payment. Focus on getting paid first before you stress out and wonder what you'll do if you don't get paid.
What should you include in the payment request?
So now you know you need to ask for payment. The customer has neglected his bill, the due date has passed, he has missed the payment deadline and no money has arrived in his account.Bank account. What do you say to your customer?
Try to write a friendly, non-threatening email subject line
The first thing to think about when requesting payment from a customer via email is the subject line. If the subject line of your email isn't well worded, your customer may not read the rest of the email. So here are some tips:
- Do not threaten customers (in topic). Name your emails "friendly payment reminder emails" instead.
- Consider labeling your reminder emails "Contract Updates."
- If necessary, use the name of your customer.
We'll show you some sample subject lines in a moment. First, let's look at some other things to include in your payment request email.
Always include a copy of the invoice
A copy of the invoice must be attached to each payment request email. This helps your customers remember what you did for them and how much they should pay. However, sometimes people get a bit confused with bills and payment details. Here are some things to remember:
- An invoice is not a legally binding document. Your contract is the legal agreement that forms the basis of your invoice. If you don't have a written contract or an agreed quote, it will be more difficult to get an original invoice.
- Without correct billing information, e.g. B. Addresses of both parties involved, dates and an invoice number, customers can ignore your invoices or return them as invalid despite the number of payment reminders you send them.
An invoice email without an attached invoice is somewhat useless. Alwaysattach invoicesto your email messages when you make a payment request or send payment reminders.
Politely remind customers of payment terms
Your payment terms should be clear in your contract and on every invoice. The contract should explain the payment process, the due date and any late fees you will be charged. Your invoice must have at least one due date or payment term, such as B. "30 days net".
Add your bank account or payment provider information to your payment request
When asking someone to pay, make it as easy as possible for your customer. Enter payment information in the invoice email and on the invoice itself, along with any business contact details. If possible, offer your customers credit card and online payment options such as direct bank transfer. Once you reach out to the customer, try to find a convenient way for them to arrange payment to avoid late payments in the future.
Payment reminder email template ideas
As promised, we'll show you how to request payment professionally. We've prepared some simple payment request email templates that you can customize for your customers. Just make sure you change the information for you and your customer.
Friendly template for a week off
Send your customer a payment reminder a week before the due date to remind the customer of your payment before it becomes overdue. This is generally a friendly, light-hearted email that should be a regular part of your payment collection process. This gives you a higher percentage of your payments on time, before the due date and before late fees are charged.
Email subject: Friendly reminder: Invoice [#] Due in a week or just a reminder: Invoice [#] Due in a week
Hello [customer name],
I hope things are okay. I really enjoyed working together on our project and would like to get in touch with you to quickly let you know that invoice [#] is due in a week.
You can check the invoice here [invoice link] and see the different payment methods I accept.
Please contact us if you have any questions about your invoice, payment methods or services rendered.
One or two day payment reminder template
Sending a quick email to a customer right after the invoice due date keeps them informed and prevents the payment from taking too long. You can give customers a few days grace period before shipping, especially if the due date falls on a weekend.
Email subject: Friendly reminder: Invoice [#] expired
Hello [customer name],
I hope you have a nice day. According to my records, invoice [#] is due on [date]. There is currently a balance of [Balance Due].
For your convenience, I've attached the invoice and payment methods here [insert invoice link].
Please contact us if there are any problems with your payment or if you have any other questions.
Thanks very much,
Friendly one week late payment reminder template
To get paid, one of the strongest tactics is consistency with your follow-up email. That doesn't mean you email your customers every day, but a weekly or bi-weekly email won't feel intrusive. Use this invoice template below to send an additional payment reminder email to your customer, or modify it at your own discretion.
Email subject: Friendly reminder: Invoice [#] One week due
Hello [customer name],
I hope your week is going well. My records indicate that I have not received payment for invoice [#] for [Invoice Amount], which is now one week overdue. could you examine this for me?
Please let me know if there is anyone else I can contact regarding payment or if there is a system or process that can facilitate payment.
I have attached the invoice for you [insert invoice link].
If you know when this payment is due we would be very grateful.
My best wishes,
Two weeks late payment friendly reminder template
It's okay to change the tone of the email because your bill is two weeks to a month overdue. We never recommend being rude to your customer, but it's okay to use a more serious tone in your follow-up email.
Email subject: Invoice [#] due two weeks
Hello [customer name],
I wanted to contact you because my records show that payment on invoice [#] is two weeks late. Any news on when it should be delivered?
I am enclosing the invoice here [invoice link]. Please let me know if I can be of any assistance. I know this is a busy time for everyone, but I'd appreciate an update.
Please note that any payments older than 30 days will incur late payment fees as per the terms of our agreement.
If you have any questions, please do not hesitate to contact us.
Final friendly payment reminder template for one month late
Now that a month has passed, we're going to show you how to request a payment a little more urgently without sounding rude. In the email sent more than a month late, it's good to confirm the original payment terms and outline some of the repercussions that non-payment of the bill may have. This can be a late payment or a fee, or if you're still working with them on a project, you can temporarily pause the services until payment is made.
Email subject: Invoice [#] is 30 days overdue; send the payment
Hello [customer name],
This is my fourth reminder that your [#] account is overdue for payment. My first email was sent to you on [date]. Please let me know if there is anything else you need from me to initiate payment.
I am attaching the invoice [insert link] here where you can easily make a professional payment through different payment methods.
As I mentioned in my previous email, under my terms, a late fee may apply in the future as the payment is more than 30 days late.
Please arrange payment of this invoice.
After you've sent your last payment reminder email, it's time to talk about what you should do if the worst-case scenario happens.
What to do if your customer doesn't pay?
It can be incredibly frustrating when your customer still doesn't pay after all the hassle. While it can be very easy to get angry with your customer, try to keep your cool. If you maintain a good relationship, you will be in a stronger position of power to move forward than if you let your anger get the better of you. Late payment is not a personal attack, even if it appears to be. Let's go through the steps you should take if a customer still doesn't pay after you've requested a payment.
Pause existing job
If your client is more than a month behind on their payment and you're still actively collaborating with them on projects, consider pausing ongoing services until the bill is paid. This reduces the risk of not paying for several months and opens up a more serious conversation with your client. This isn't a strategy you can use for a one-off project, but if they don't pay you on time, that's a legitimate reason not to work with them again or to charge 50% upfront.
pick up the phone
If your last payment request email didn't get a response, a phone call with your customer can eliminate the possibility that your company's contact details are incorrect, your emails didn't make it to the intended email folder, contact is lost . I know it seems far fetched, but it's worth covering your basics to see if there's been a misunderstanding or to get an update on your payment. Remember to be polite and sensitive when requesting payment as you will protect your reputation and your relationship.
What if there are no results? Should You Hire a Debt Collection Agency?
What if the customer simply refuses to pay? Let's be serious: this is your business. You can send one billing email after another, but at some point you have to respect your business and require your customers to do the same.
Before we talk about the drastic measures you can take, let's go back to one of our earlier points. Your invoices are not legally binding documents. If you didn't start with a contract or an agreed-upon offer, you need to tread carefully.
Collection agencies are your last resort. They cost you money and damage your reputation with your customers, probably beyond repair. You have another option: take your client to court.
This is why a lawsuit is better: the law is on your side. Even if you don't have a contract, any paperwork, even if it's just an email or text message, is enough to show your agreement with your client to establish a contractual situation between you. On a pitch you have to stand on solid ground. If you bring your client before a small claims court, in many cases you have to bear the court costs.
A few more tips to avoid late payments
While late payment isn't always avoidable, there are some strategies you can use to minimize the risk. Here are some things to incorporate into your business if you haven't already:
- Use contract:A good way to avoid paying is to have clear terms and conditions from the start. This is where having a legal contract is important, and IndyCar can help.See how easy it is to create a customer agreement. In a contract, you can set a late payment penalty that discourages customers from missing payment deadlines.
- Request customer approval:In addition to your contract, you canArchiv-Toolfrom Indy to get your work approved. This is useful to make it clear that your work has been accepted and should therefore be paid for.
- Prepayments:Another way to ease the pain of a late payment is to require a deposit upfront. There's no hard and fast rule on how much you should charge upfront, but freelancers typically charge anywhere from 10% to 50% of the total budget.
- Make payments easy:Customers can be busy, so it becomes easier for the customer to accept as many payment methods as possible.
- Maintain relationship:Talk to your clients from time to time throughout the project. Keep 'em posted on where you areask her how it goes on in the end, and maintain a healthy relationship while working with them. A strong relationship helps build mutual trust and makes it easier for both of you if you ever have to ask about a late payment.
Did we miss something? Do you have a hopeful or horror story to tell? Contact us and tell us!
frequently asked Questions
How do you politely ask for payment?
The most polite way to request payment is to email an invoice as a reminder. Companies get them regularly and accept them as part of life. Send a simple payment request email and another if the late bill payment isn't made. Always be polite in your communications.
How do you ask for payment without being rude?
Don't do it personally for yourself or the customer. You don't have to tell them how much money you need or how much time they're wasting. Likewise, your customers are probably the most resourceful part of the relationship. They must not harass you for non-payment. So avoid being rude, back up your demands with a polite reminder and be professional at all times when discussing overdue bills.
How to politely ask for payment via SMS?
If you've already sent an email, you might want to try a text message instead of the next email reminder. However, we think you're better off with phone calls. If you have her number, just call her.
What happens if someone refuses to pay?
If your bill is weeks overdue, you can hire a collection agency or take your customer to court. Just do some research on collection agencies if you think you should go down this route. Unfortunately, you can also remember and cancel one in the "Lessons Learned" column. However, this is your business. It's probably worth taking them to court if they don't pay the original bill.
How can a small business owner deal with late payments?
Small business owners regularly face liquidity problems. The best time to deal with late payments is before they occur. Order your contracts with the right contact details, have every client sign a contract before starting work and use a good billing system. We hope that your company will no longer have problems with late payments.