Payment of overdue accounts

With businesses experiencing a combination of inflation costs, a potential economic downturn as well as unexpected costs from recent weather events, asking for payment of overdue accounts can become a challenge. Protecting your business from unpaid invoices and bad debts is important and you’ll also want to minimise the risk to your cashflow. Here are some ideas to help you get paid.

1.     Ask how customers are
Many businesses receive a lot of emails in a day, so an email may get missed or lost in an inbox. When you call your customers, make sure to first ask how they are. Your assumptions may be wrong and they may have been more impacted than you realise. Be respectful and kind in your positioning. If your customer is genuinely struggling, demanding payment is unlikely to yield the results you’re looking for, but empathy can go a long way.

2.     Triage your debts

Consider those customers who are likely to be the most impacted – they’ll need to be treated with empathy and flexibility. Those who are likely to be less affected and may have a lesser debt, are probably the first people to call as they are more likely to be able to pay you.

3.     Offer options to repay debt

Be honest and tell them why you’re calling. Offer them options to pay their overdue account such as spreading payments across the next 3-6 months. Empathy and professionalism are key and likely to go a long way.

4.     Reach a repayment agreement

Once you’ve reached an agreement, record the details and set a reminder to check when due again. If payment doesn’t come through on the agreed date/dates, follow up with the customer. Again, empathy, flexibility and repayment options are more likely to result in the debt being repaid.

If your customer’s ability to repay you is an issue or is causing you cashflow difficulties, talk to us about how we can help. We can support you to manage your accounts receivable and ensure you have your best shot at getting paid.