How to prevent past due payments in the future
The past due invoice email templates can help you collect payments on invoices that are already overdue. There are steps you can take with other current customers and those you work with in the future to increase the likelihood of on-time payments.
1. Agree upfront to a preferred invoice payment process
For faster payments, hold the invoice conversation right at the start, before you do the work. If it’s too late for that, don’t beat yourself up. There’s always next time.
It can be easier to get payment if you’ve determined these two specific logistics of what your client wants and needs in an invoice:
- Who should get the invoice: Sometimes it’s the client, sometimes it’s the accounting department, or even both. Make sure you know the procedure to expedite smoother, faster payment.
- How they like to pay: Offering your customers more payment options, such as credit card, eCheck, or direct ACH bank transfer, ensures that there’s not a holdup for an easily avoidable reason.
It’s an extremely common situation: a client becomes accustomed to paying for almost everything one way, only to become inconvenienced when that payment method isn’t available. If they pay for everything by credit card, and you’re asking for a check, they may not ever find the time to locate their checkbook, get a stamp, and put the check in the mail.
If your client hasn’t paid you on time, asking, “Would you prefer to pay another way?” might be all it takes to get paid on time in the future. QuickBooks Payments offers payment methods like credit and debit cards, ACH bank transfers, Apple PayⓇ, PayPal, and Venmo, and pay instantly online to give clients a choice about the easiest way to pay.
2. Clarify what your customer is paying for and when it's due
Clients are more likely to pay on time when the invoice makes what they’re paying for crystal clear. That’s why you want to make sure you’ve included all the information a client needs.
This could include:
- Consultation time
- Hours spent on specific tasks
- Research time
- Distinct project numbers for pre-defined deliverables
- Cost of materials
If you haven’t yet cataloged your products or services, it’s a worthwhile exercise that can make everything from marketing your business to sending invoices more efficient in the future.
You should also check that your payment terms and due date are featured in a prominent place on your invoice design. Without clear payment terms, it’s your word against theirs when an invoice is actually “late.”
It's tempting to mark an invoice with “due upon receipt,” but that can be confusing to some clients. Adding a date gives them a concrete target to meet. The most common payment term is “Net 30,” which means the recipient must pay their invoice within 30 days of the invoice date.
Then be proactive and remind customers of their outstanding payments. Sending a reminder that their payment is due next week gives them a heads up. It might get the money you’re owed in your hands more quickly.
3. Establish a process for following up on past due invoices
Having “the conversation” about past due payments can be a source of anxiety, especially when paying your own bills on time depends on cash flow from invoices. Having a system for following up on late payments can help you to feel calm and move on to your other work.
Saving your customized versions of the payment reminder email templates in this article can make your manual invoice follow-up process faster in the future. Accounting software like QuickBooks lets you set up automatic invoice reminders for overdue payments. You can also keep tabs on open invoices, sort them by client and due date, and track payments in real time.