As a supplier, contractor or manufacturer who works with customers on credit terms, you put a lot of trust in the customer that he will pay you on time and in full. If you don't stay on top of the account, you could end up with a client who is reluctant to pay. Send a request for payment of an invoice as soon as the invoice becomes due.
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Set your payment terms. Include the number of days the customer has to pay; for example, 30 days from the invoice date, and the consequences if the customer does not pay on time, such as forfeiture of any discounts, late fees or legal action.
Write an invoice letter that specifically asks the customer for payment to go with the actual invoice. In the letter, provide a description of the items that you supplied, the extended price and the date that the invoice is due. Highlight the date and the terms on the actual invoice as well.
Consider including an additional discount in your terms if the customer pays the invoice early. For example, you might reward the customer with an additional five per cent discount if she pays within 15 days, though the invoice is officially due in 30 days.
Post, fax or email the letter and invoice to the customer as soon as possible, but preferably after delivery of goods or services.
Send an email to the customer 10 days after the invoice is due to remind him once more.
Tips and warnings
- Be firm yet reasonable in your request letter. Get right to the point and avoid small talk. If a customer sees any signs of weakness or excessive friendliness, he may try to take advantage of the situation.
- Be sure to get a signature confirmation on all received orders to verify that the customer did get the goods.
- If two or more months go by past the invoice due date and you still do not receive payment, send one last invoice letter to the customer listing the new amount due. Let it be known that you will go to court if you do not receive payment by a certain date. Your final decision on whether to sue will depend on the cost of legal action and travelling to court.
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