One of the most boring and annoying tasks a freelancer or small business owner has to do is to chase customers for overdue payments.   Whilst there are no hard and fast rules, I believe that there are 5 stages to chasing payment.

Of course before you chase, you need to know that payment is due.  Tracking invoice due dates and payments is the key to good credit control, so first make sure your accounts system is up to the job to make tracking and chasing as easy as possible.

So my own personal five stages of chasing are as follows:

Invoice becomes Due

It never hurts to tell customers that payment is due.   A quick email is all it takes (some accounts packages like Freeagent will automatically send this (and other) reminders for you).   I keep it simple and straight forward such as:

Jo,

Just a quick reminder that payment is now due on invoice number 9182.  This invoice was in regard to the {whatever the task is that you performed} and was for £999.99 (including VAT).  I would be grateful if you could arrange payment at your earliest opportunity.

If you have already made payment, thank you for your custom and please disregard this email.

Invoice Due + 7 days

Once the invoice is 7 days overdue, I repeat the reminder.  However, in my terms and conditions I have a late payment fee – so I include a note that this late payment fee will soon become payable:

Jo,

Please note that invoice number 9182 is still overdue.  This invoice was in regard to the {whatever the task is that you performed] and was for £999.99 (including VAT).

Can I also take this opportunity to remind you that as per section 7 of our Terms and Conditions, late payment of such invoices is subject to additional interest and an administration fee.    To avoid these additional costs, please could arrange payment at your earliest opportunity.   If you have already made payment, thank you for your custom and please disregard this email.

Invoice Due + 10 days

Once the invoice is 10 days overdue, I send a further email, but now I also state that we WILL be raising the late payment fee (and I raise the invoice the following day – extra money for me):

Jo,

Further to my last two reminders, I note that invoice number 9182 is still overdue.  This invoice was in regard to the {whatever the task is that you performed] and was for £999.99 (including VAT).

As per section 7 of our Terms and Conditions, late payment of such invoices is subject to additional interest and an administration fee.  We are in the process of raising an additional invoice for this fee which will be sent by a separate email.    To avoid any additional costs, or if you have already made payment, please contact me as soon as possible to confirm the payment has been made.

Invoice Due + 20 days

Once the invoice is 20 days overdue, I generally will put the customer on STOP.  Of course, this really only acts as a persuader to pay when I am still doing further work with the customer, but it is another chance to chase and remind your customer to take late payment seriously:

Jo,

** ACCOUNT ON STOP **

Further to my previous reminders, I am having to email you in regard to invoice number 9182 which is still overdue.  This invoice was in regard to the {whatever the task is that you performed] and was for £999.99 (including VAT), and was due for payment one month ago.

Because this payment has been overdue for so long, I have been instructed that we have had to place your account on STOP.  As a result, we will not be able to provide you with any support, continue on an developments or discuss any future service until this invoice is settled.

To avoid any additional costs, or if you have already made payment, please contact me as soon as possible to confirm the payment has been made.

Invoice Due + 25 days

It is vary rare that I ever get to this point in time.  But when I do, I stop sending emails, and start phoning.  Yes, it takes more time, and feels awkward, but at the end of the day you and I have done nothing wrong, it’s the customer who should feel bad for not paying their bills on time.

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