These Tips will Help you to Handle Late-Paying Customers

Late payments can make running a business challenging. Cash flow is very important and if you have customers who are slow at paying then this can cause you to experience financial difficulty or even debt. Luckily, there are a few ways to make sure that you limit the amount of late-paying customers you have.

Online Tools

There are various credit control tools available for you to choose from. These will make your life easier when you are chasing invoices. If you choose the right one, then you can easily find out when an invoice is due, and you can also find out what expenses you have coming out too. If you’re spoilt for choice then QuickBooks online accounting software is a great investment.

Source: Pexels (CC0 License)

Be Proactive

It doesn’t matter whether you have a team of employees or whether you are a sole trader because you should have a fixed process when dealing with a late-paying customer. Prevention is always better than cure, so try and make it so every client signs a terms and conditions form when dealing with your company. This form should detail your process regarding late payments and whether or not you charge interest. You might also want to detail what happens in the worst-case scenario too, as this can be a great deterrent.

Contact the Client

The day the payment is overdue, you need to contact the client. Phone is always better than email because it gives you the chance to get the answer you need right away, and it also means that you won’t be misinterpreted. When talking with the client, it helps to make sure that your conversation is friendly and that you are open to an explanation. After all, there could be a good reason why the invoice has not been paid and if there is, you might want to show some leniency. Ask the client to give you a date when the payment will be made, and if they are unable to do this then tell them that you will call again the next day.


If, after chasing the customer you have not received any form of payment from them, then send them an email reminder and follow up with a phone call. At this point, you need to be cautious of excuses and you also need to be firm too. If subsequent invoices have not been paid, then now is a good time for you to withdraw your services from the client. This will put pressure on them, and it will also encourage them to settle faster. Of course, it’s possible that your client is experiencing financial issues and if this is the case then you need to arrange a meeting where you can agree to an instalment plan or even a settlement. This is the best way for you to guarantee that the money is going to be paid, even if it isn’t right away. As a last resort, you can take the client to court, but this could have damaging consequences for both parties so keep that in mind.


Leave a Reply