How to deal with late payments on invoices without feeling rude or awkward

You've done the work. You invoiced the client over 30 days ago. You're still waiting for payment a week over the invoice deadline. It's time to chase but, quite frankly, you'd rather play Justin Bieber on constant repeat and stick red hot nails in your eyes than speak to your client.

Image courtesy of [Adobe Stock](

Image courtesy of Adobe Stock

Let's face it. Chasing late payments on invoices is one of the toughest and most awkward jobs for any small business owner. It's never easy, emailing or phoning a client to ask for money. But this is business. And you are entitled to be paid for the work you've carried out.

If you're struggling and you're sick and tired of dealing with late payers, here are our top tips to help you get over that awkward hump (and avoid any issues).

Don't think you're rude

Firstly, you've done the work, and the client is happy, so you're entitled to get paid. And, more importantly, you're entitled to get paid on time. You're not a bank. You're not able to work in credit. If you don't get paid, you can't pay your bills – full stop.

With all this in mind, you should stop thinking you're rude by chasing payments. It's the client who is being rude for not paying! Plus, you are totally within your rights to ensure you settle invoices. Remind yourself of these points whenever you feel yourself hesitating in future.

Set terms and expectations early on

Terms of invoicing are one of those things that every small business owner will have to establish with each client. Talking about these terms early on will avoid any awkwardness further down the line.

Not sure what terms to apply? You really can set your own. You can request payment upfront, although this might be challenging. (You could tell brand new clients that the first invoice always requires payment before work begins – to get going. It's worked for me!)

You could ask for a deposit – try 50% of the total project cost before work begins. That way, you've got a little insurance behind you, should payments be delayed in future. Or you could go for the standard 30-day terms. It's up to you.

Inform clients that you charge interest for late payments

Some people charge an extra 3% after 60 days – others 2% after 30 days. Another creative stipulates that if the final invoice isn't paid within 30 days, a 5% 'delayed payment' fee is charged. And that first 5% figure is then added to each recurring 30-day period until the full amount is received. It's really up to you how you set your terms. But be warned – great client relationships are built on trust. You have to ask yourself whether it's worth threatening interest before you've even had a chance to prove your worth.

Read this excellent guide from the government on Late Commercial Payments. It points out that the interest you can charge if another business is late paying for goods or a service is ‘statutory interest’ – this is 8% plus the Bank of England base rate for business to business transactions. So, if the base rate is currently 0.5% – this means statutory interest for a new debt would be 8.5%. Read more on Recovering Debt.

Have a script to hand for email reminders

Writing an email to chase for payment is hugely tricky and will naturally take you some time to construct. You don't want to come across aggressive, but you need to be firm. You don't want to seem too demanding, but you have to ensure payment is made. In which case, save yourself time by having a prepared script you can call upon. Here are some handy examples:

"Hi Clare,
This is a friendly reminder that invoice 33 is now due for payment. I'd appreciate if you could settle at your earliest opportunity.

And if several friendly emails don't lead to payment? Well, it's time to start getting serious and remind your client of the terms you initially set out. You could write something like:

"Hi Clare,
Payment still hasn't been made for invoice 33. I attach another copy with my payment details.

Just a friendly reminder – if payment is not received within 30 days, I reserve the right to add late payment charges to your account, as detailed in my terms.

Hope that makes sense.

Pick up the phone

If you've emailed several times, you've become increasingly firm, and you still haven't been paid – pick up the phone and call your client. Sometimes having a chat is all it takes to ensure payment. Keep phoning every other day to add some pressure, and that usually does the trick.

Or, if you really can't face the task, hire a freelance virtual PA to do the chasing for you. Sometimes having someone else do the chasing adds more authority and credibility to your business and gets clients worried about not paying.

Make things automated

If you really can't stand sending out those email reminders, why not automate away some of that awkwardness by using an online service to send out invoice reminders on your behalf?

FreeAgent offers this service beautifully. I use it for Creative Boom and my own PR business, Boomerang. It allows you to write your unpaid invoice reminder email; then you can set FreeAgent to send it automatically when an invoice becomes overdue. Job done! It won't necessarily ensure payment is made, but at least it saves you from another awkward conversation or the hassle and time it takes to chase for payments.

Find out who deals with payments and the process behind them

Sometimes, invoices don't get paid on time because you've not sent them to the right person or department, or followed the client's payment process. So if all else fails, find out who to send invoices to, call them and become their friend. Ask them directly on how to ensure you get paid on time, as there'll be different processes in place with every client. It might be that you have to include a PO number or a specific date. Whatever it is, follow that process, and you shouldn't have a problem in future.

Remember you're dealing with humans

Above all, use your discretion. Clients are only human. They're busy too. Which means they can easily forget about your invoice and sometimes need a gentle nudge. Don't assume the worst. Use a gentle approach initially and, if that doesn't work, try a different tact. Most clients will pay – you have to be proactive and persistent. Good luck!

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