What’s the best way to ask customers for payments?

Following up when customers haven't paid you on time can be frustrating and inconvenient, and means less time to focus on other business priorities. Saving time and avoiding cash management problems is a serious concern for business owners when they extend credit to their customers. 

What's more, it is a growing concern. A recent report suggests that invoices are paid late 60 per cent of the time and more than a third of small and medium-sized firms believe they are negatively affected by late payments, which can impact suppliers, employees, and financial investments.

Because of this, you must learn how to remind customers to pay proactively. This will help prevent the awkward, uncomfortable, and potentially frustrating interactions nobody wants when a customer doesn't pay on time. Keeping a few best practices in mind will help when asking for payment when it's most beneficial for your business, without seeming annoying or desperate.

This blog compares the various channels you can use to follow up on customer invoice payments such as email, SMS text payment reminders, and collections phone calls. It explores the strengths and weaknesses of each channel of payment follow-up, and when certain channels can be more useful in your specific payment follow-up situation.

First things first: be polite, be courteous, be professional

Whatever channels you utilise to follow up on late payments - always stay polite and professional in your invoice reminders.

It can be extremely frustrating when your business gets paid late. Delays can cause significant financial problems and make it hard to keep your enterprise afloat. Companies that don't receive what they are owed can encounter dangerous cash flow issues and problems with financing.

Even so, be polite and professional in your reminders. This approach maintains your great customer relationships and your reputation in the industry. It stops the other party from becoming defensive or combative.

Keep these few points in mind when you have to ask for payment:

• Initiate efficient invoicing communication as soon as you issue the invoice.
• Clarify your point of contact, and provide any relevant payment information.
• Confirm your payment terms and invoice details, and ensure they have all the information they need to approve and pay on time.
• Ensure that reminders are sent before the payment deadline.
• Ask customers to confirm receipt of the request payment email and inform you of any anticipated payment delays.
• Be polite and professional in your communication, ask for payment professionally and show customers respect

Here is an example of how to strike a polite and professional tone in your next payment request:

Continue to follow up until payment is received. Use these 6 polite payment request email templates if you need extra resources to fulfil this objective.

Via email: Best for providing details and documents

Email is one of the most efficient methods when asking customers for payment politely. It is a quick and painless way to communicate with your customers.

A payment request email also allows you to be more personal with your message. You can easily include payment terms, attach an invoice copy, and customer statements, or link customers to a payment gateway to make instant payments. Messages ensure your customer receives all relevant information and documentation within one statement they need to pay overdue invoices instantly.

Effective invoicing communication via email must begin as soon as your invoice is issued. You can also kindly ask your customer to confirm receipt of the email and share any anticipated overdue payment delays in advance in your before-due payment reminder email.

However, other approaches can be better when there are complex or sensitive issues to resolve surrounding a payment, or your customer relationship is on the line over an unsettled debt. Contacting your customer directly or phoning accounts receivables is often a better approach.

Don't ask for payment aggressively. Some companies forget about outstanding payments while others don't read their emails.

Best practices for sending reminders for overdue payment via emails:

• Emails must have a clear and concise direct subject line. Include details about the late payment and the action the particular client should take.
• Include your business name and the invoice number in the Subject line of payment request emails. This encourages the customer to flag it or find it easily when they want to.
• Open your email with pleasantries. You are more likely to receive payment if you remain polite.
• Include a courteous reminder of the invoice number, the amount owed, and the payment due date. Offer multiple payment methods if possible and give payment provider information.
• Conclude with expressing gratitude for their continued business and for their timely payments. Reassert you offer multiple payment options and that you always collect overdue payments.
• Don't forget to attach a copy of the original invoice with the email. It should detail the outstanding payment amount and any advance deposit balances.

Furthermore, emails can be used within automated accounts receivables software to minimise the time spent following up on late payments, reduce human errors and increase operational efficiency. Companies can ask for payment without having to involve finance professionals directly.

When used correctly, email is an effective tool to ask for payment and can help you speed up the payment process. Solutions let you attach all the details and documentation your customer might need in one message and are an accessible means of communication utilised by most businesses today. 

Via SMS texts: best for reaching customers quickly

SMS reminders are an efficient tool to remind customers about upcoming or overdue payment invoices that get your message across quickly. These allow you to reach customers whilst they're on the go and request payments and money in your bank account. SMS messages have an open rate of 98% (Tyntec), making them the most likely method of payment follow-up to get noticed, and read. 

By pairing your SMS payment reminders with a payment gateway and including a link to pay, you can allow customers to pay their invoices instantly from their phones. This technology reduces barriers to payment and increases your chances of prompt payments (reducing the risk of late fees). Following best practices can ensure you get the most out of your SMS reminder texts and ensure you send them to decision-makers who can act on payment requests.

SMS overdue invoice reminders are nudges to secure invoice payment politely before the next due date. When you request payment professionally, it makes it less likely you will need to use a debt collection agency or apply a late payment fee.

That said, using SMS facilities to ask for payment isn't always the best option. Email reminders can be more effective when customers require more detailed information to complete their payment. Text message reminders don't always have space to include all the payment details or the original invoice.

Best practices for sending reminders over SMS

Whenever you ask for payment using SMS, always follow best practices. Don't threaten late payment fees immediately, as that might leave customers feeling threatened. Instead, seek payment professionally and issue a polite reminder, including your business contact details for direct transfer.

• Ensure you have the right phone number, and that it belongs to a decision-maker (someone who can act on overdue payments). Mixing up your numbers and sending reminders to the wrong person makes receiving outstanding payments less likely.
• Always personalise your SMS reminders and include the customer's name, invoice number, and payment due date. This helps establish a personal connection and increases your chances of receiving early payments.
• Include your payment terms in the SMS if you have space. Alternatively, use one of Chaser’s payment request email templates and send the details by electronic mail.
• Include payment portal links in your SMS reminders. Give customers an option to pay their invoices quickly and immediately if they have an unpaid invoice.
• Add the payment deadline. Sometimes clients don't understand the urgency of unpaid invoices. Therefore, tell them when they need to make the overdue payment. (Usually, it is customary to offer an additional 30 days, though you may want to reduce this).
• Backup your SMS with a payment request email. Don't forget to ask for payment through multiple channels to remind clients and invoice efficiently.

Asking for payment professionally via SMS is always challenging (primarily because of limited space). However, Chaser offers various templates you can use.

Here is a short and sweet template for sending payment reminders over SMS and texts to your customers:

Follow up on late payments via SMS with these five pre-made payment reminder text samples.

Over the phone: Best for issue resolution

Calls are best when you have to resolve any disputes with the customer — whether that's over the amount you asked for or the timing of the payment. When you ask for payment over the phone, you can gauge the customer's mental state and adjust your approach if applicable.

Accounts receivable phone calls allow a more personal approach than other overdue payment follow-ups. Conversation can help you understand outstanding invoices more clearly and resolve them tactfully and sensitively. Generally, calls are an excellent tool to build positive long-term customer relationships. 

Email and SMS reminders are usually sufficient to nudge your clients into paying their past-due invoices, but in some cases, a phone call can be necessary. Therefore, it may help to include them in your overdue invoice payment process.

Here are some common instances where it's better to pick up the phone:

When your customer doesn't respond to your emails

If you've sent your customer three emails requesting payment and haven't received a suitable answer, it's time to call. Some firms are unwilling to pay overdue invoices immediately or aren't getting your messages.

When the customer doesn't respond to your SMS reminders

If you haven't gotten a response after the SMS reminders sent via text – call your customer. Phone calls aren't as easy to ignore but still let you ask for payment professionally.

Before sending a letter of demand or pursuing debt collections after the due date, make customers aware of your next steps by calling. Telling them your reasons for doing so lets them resolve the situation before you take more serious action. Remind them of your payment terms and that they might have to pay a late fee if they are several weeks overdue.

Of course, accounts receivables phone calls require a high time-input for your finance team. Staff must prepare, conduct lengthy conversations, and research clients to ensure the correct payment contact is reached over the phone. Asking for payment professionally requires studying payment terms, any advance deposit made, and calculating late fees.

Because of this, payment follow-ups over the phone are only recommended when other, more efficient methods, such as email and text messages have proven ineffective after multiple attempts. Automating payment request processes makes you operationally efficient and increases the effectiveness of phoning by deploying them only when necessary. A payment request email requires no labour (when using automation software) while calling leaves less time for accounts teams to work on other projects.

Best practices for talking over the phone: How to ask customer for payment

Chaser’s 10 conversation scripts to get invoices paid over the phone can help when you are on a call with customers. However, there are certain seven key steps you should take to prepare:

1) Ensure that your invoice information is correctly tracked and updated

You don't want to waste your time calling a customer who has already paid. You should also double-check the due date – is the payment late or not?

2) Keep your cool and your head in the game

Late payments can be sensitive, especially if your company's financial health is on the line. Therefore, ask for payment professionally. Stay level-headed and polite and find a successful resolution to the dispute. If you need to negotiate payment terms, do so.

3) Have all the important information available before the call to avoid confusion

Keep the invoice handy, including the invoice number, the product or service rendered, the calendar date of the payment request and the due date. All relevant information must be in your hand before you sit down, call and ask for payment.

4) Offer multiple payment options

Ensure you provide your customers with several ways to pay when you ask for payment. Small business owners might only be able to pay you through specific methods.

5) Be positive and proactive

When you make the payment request, give your customer the impression you are on their side and trying to help them. If they are finding it hard to pay, be empathetic and understanding. Sometimes, using the right emotions can help collect payment from clients.

7) Anticipate objections

It can also help to consider what might stop clients from responding to your payment reminder requests. If you know their pain points, you can preemptively deal with them before getting on the pay. For example, an unpaid invoice might exist because your accepted payment methods aren't what customers need. Alternatively, difficult-to-understand payment terms could get in the way, preventing clients from transferring funds by the payment due date. Learn more about how to deal with common disputes and objections.

Script your conversation

Following a verbal template can help you present the optimal case every time you approach a customer, keeping you focused on your goal when you ask for payment– collecting the money owed in the original invoice and any late fees. Debtor phone call scripts should introduce your company, confirm receipt of the invoice, and seek to understand the reason for the delay. Professional and polite reminders can help avoid further conflict.

Via posted letter: Best for formality and urgency

While emails and SMS payment reminders provide a speedier delivery method, some people believe they lack the same sense of professionalism that letters offer. Many—perhaps older—customers regard physical mail as having more "importance" than an email.

It may also be psychologically persuasive. Corporations threatening legal action over outstanding bills must contact clients via letter rather than email. Formal notification of a payment due date and payment details can help kickstart a court case.

Furthermore, letters are more likely to get read than emails, especially if clients have busy inboxes. Customers are more likely to gloss over an email requesting payment than something more physical.

Therefore, always communicate via posted letters when taking serious steps, such as threatening legal action. You can also include this information in payment reminder emails if you think it will help your cause, but don't rely on it solely. Some of your clients may not have access to email, particularly if they conduct business without computers (e.g. farmers, builders), or live in a rural area with limited internet access.  

Best practices for sending posted letters

When a customer's payment is overdue, sending them a “formal letter” to notify them of imminent debt collection or legal action is common practice. You should use a formal tone and wording and explain the consequences of a late payment. Below are nine tips to ensure your payment reminder letter is effective:

1. Objectively provide the facts. Don't resort to theatrics when writing a letter of demand. Keep it formal and thoroughly professional. Let the customer know you may use a collection agency.
   
   
2. Include accurate information about the defaulting customer. Add their address, contact details, etc., to the correspondence. Include the past due date, the amount owed, and the number of reminders or notices sent.
   
   
3. Briefly outline the course of action you will be forced to take. Tell the customer what will happen if they don't pay. Be direct about pursuing legal action and any late fees if they refuse to pay the invoice attached.
   
   
4. Attach copies of the invoice, a statement of account or any other document pertinent to the matter. Provide paperwork to support the legitimacy of your payment reminder.
   
   
5. Use formal and professional language. Don't take a casual approach to payment collection. Being laid-back may encourage customers to continue to delay payments.
   
   
6. Include proof of sending. Provide documentation showing customers you have evidence they received the payment letter.
   
   
7. Send letters before taking further action. Don't engage in legal proceedings until clients take possession of payment letter requests. Jumping the gun could create dissatisfaction and undermine the legal process.
   
   
8. Maintain a record of letters sent. Keep copies of correspondence to put in the mail for future reference. Ensure they are identical to the documentation sent to clients.
   
   
9. Include a call to action. Word the letter so customers can act immediately and pay you.

When to outsource your payment collections

Asking customers for money can feel awkward as a business owner (which is why many companies don't want to do it). But when you don't chase payments, you leave money on the table which can negatively impact your business' cash flow. You also miss out on the opportunity to improve your operations and build stronger relationships with your customers.

Hence, outsourcing your accounts receivables or letting a third party take care of the debt collection of dues is a beneficial option for many businesses. You can avoid the awkwardness of asking customers for payments and focus more time on maintaining great relationships with them.

It's best to outsource your credit control and collection of dues if:

• You have lots of unpaid invoices, or payments generally come in late.
• You are writing off debts.
• You are constantly invoicing late and forget to, or put off sending reminders
• You don't have an in-house team or a dedicated employee to monitor, track, and pursue outstanding invoices.
• You lack the necessary tools or experience to track your invoices.
• You don't have a fine-tuned credit control policy in place.
• You regularly research collection agencies because you worry about asking for payment

How should your business ask customers for payments?

There is no right or wrong method to ask a customer to pay their invoices—but there will often be one that may be more appropriate than the others. Which method you should use to send payment reminders depends on where in the collection cycle you are. Emails and SMS are the most effective and efficient for the first few customer reminders. However, they may not be suitable for more outstanding payments.

If clients are more stubborn and a simple payment request email doesn't work, implement accounts receivables phone calls to address any issues delaying receipt of funds. Ensure you have the relevant invoice to hand and maintain a professional demeanour. Don't get into a shouting match and empathise with clients, regardless of their non-payment excuses.

Finally, if debts remain outstanding consider using postal letters as part of the collections process. A collection agency can leverage these when conducting fieldwork or defending its actions in court.

Avoiding overdue payments and unpaid invoices

Ideally, you would like to avoid the need to remind clients they need to pay you in the first place. If everyone paid on time, you wouldn't need to send reminders via text message, payment request email, or mail.

For this reason, smart companies do the following:

• Deliver excellent customer service. Creating a sense of rapport and reciprocity makes customers want to engage with you. The more they like you, the more likely they will pay on time.
• Offer early payment discounts. Shift your payment terms to favour clients who pay early. Give them every reason to send payment and avoid your late fee.
• Perform proactive credit checks. Seek customers with a reliable history of paying on time. Look for companies and individuals with excellent credit ratings if servicing large projects or bulk orders.
• Define your contractual terms clearly. Show clients you follow strict processes to ensure your business remains afloat. Maintain open communication at all times.
• Reinforce your wording by mentioning legal terms. Use statements reflecting UK debt collection laws and discuss your readiness to take legal action as a last resort.
• Offer a flexible payment process. Providing multiple options can encourage clients to pay earlier than they otherwise might. Offering finance, instalment plans, or credit card processing makes payment easier, allowing customers to spend beyond their means. Once payment is made, you receive the money and the finance company is responsible for collecting the outstanding balance.
• Seek legal advice. In some situations, it may be appropriate to seek legal advice if you worry about late payments. Some industries are worse than others when it comes to delays.

Avoiding awkward conversations

Of course, all these methods require being proactive with clients. And that's not always something business leaders want to do.

Fortunately, there is a way to avoid the hassle of following up on late payments. Chaser's accounts receivables automation software lets you follow up on payments automatically, without losing the personal touch. Solutions automatically send customised email, SMS, letter, and automated debtor phone call reminders according to your chosen schedules- to target customers via the best channels, at the right time.

Chaser also logs payment requests and call notes in the built-in receivables CRM to track progress and all payment data in one place, including customer replies. Businesses using the software get paid 54 days faster and save over 15 hours weekly on accounts receivables tasks. 

Get invoices paid faster automatically and save time with Chaser, with a 14-day free trial.