What to do when customers always pay late

A Direct, Useful Answer to the Question

Start by tracking not just who’s late, but how they respond to reminders. Note if they open emails or click links. This gives you an early heads-up on who might default. Prioritize follow-up with customers who ignore your messages completely. They’re the ones more likely to turn into bad debt.

What Most Owners Try First, and Why It Stops Working

Most business owners start with sending polite reminder emails. Maybe you’ve set a calendar reminder to nudge you when an invoice is a week overdue. You might even have tried calling. But soon, the late payers start tuning out your messages, or you’re stuck in endless rounds of “I’ll pay next week” promises.

What to Do Instead

1. Monitor Engagement: Use your email service to track if customers open your messages or click links. This shows if they’re even paying attention.

1. Identify Patterns: Who’s consistently late but still engages with your emails? These customers might just need a firmer reminder. But if someone is late and never opens your emails, they’re a red flag.

1. Tailor Your Follow-ups: For those who engage, remind them soon after the invoice is due. For those who don’t, escalate quickly to a phone call or a more direct email.

1. Set Clear Terms: In your communications, always restate your payment terms and any penalties for late payment. This sets expectations and encourages timely action.

Here’s a simple email template to get started:

``` Subject: Friendly Reminder: Invoice [Invoice Number] is Due

Hi [Customer Name],

I hope this finds you well. This is a quick reminder that invoice [Invoice Number] for [amount] was due on [due date]. If you’ve already sent the payment, please disregard this message. Otherwise, please let me know if there are any issues or if you need any assistance.

Thank you for your attention.

Best, [Your Name] ```

How This Gets Easier with a Scheduled Follow-Up

Imagine a system that drafts follow-up messages based on each customer's behavior and waits for your approval to send them. That's where a tool like ARPilot can help. It connects to QuickBooks Online, pulling in invoice data and tracking customer interactions. You approve each message before it goes out, giving you control while reducing manual work. This way, you’ll know who’s ignoring you and who’s just slow, and you can focus your efforts where they’re needed most.

FAQ

Q: How can I tell if a customer is about to default? A: Track if they’re opening your emails or engaging with reminders. If a customer is overdue and hasn't responded to any communications, that’s a red flag.

Q: What’s the best way to follow up on late payments? A: Start with a friendly reminder, then escalate to more direct communication if they don’t engage. Tailor your approach based on their response patterns.

Q: Can I automate follow-ups without losing control? A: Yes. Use a tool like ARPilot that drafts messages based on behavior but waits for your approval before sending. This keeps you in control of the communication.

Q: How do I handle a customer who’s always late but always pays? A: Adjust your follow-up strategy to be firmer and more frequent, reminding them of the payment terms and any potential late fees.

Q: Is it worth offering payment plans to late payers? A: For customers who engage but struggle with full payments, offering a payment plan can be a good strategy. It keeps the dialogue open and helps recover owed money.