Struggling with late payment from a client?
It can be a nerve-wracking experience. Do you chase down your money? Do you let it slide? How do you get the invoice paid?
Keep reading for our step-by-step guide for getting paid, including email copy and, if you need it, a Demand for Payment Letter sample.
But first, I have to say this…
Solopreneur Life, its officers, and I are not lawyers and make no warranties that this advice will protect your business from loss, lawsuits, or damages. Rely on our tips at your own risk. Please consult your attorney for legal advice.
What to Do When You Have a Late Invoice Payment
Step 1. Collect Your Facts
After sending an invoice, it’s a good idea to mark your calendar with the date it was sent and the day it’s due. That will remind you to follow up if you don’t hear back from the client.
If you aren’t paid on time, you need to have a process for following up and escalating the issue, if needed. You also need to understand the big picture, so you get the outcome you’re looking for.
Technology makes it almost impossible to unintentionally pay late. So late payments are a red flag.
Even so, it’s best to give your client the benefit of the doubt. Maybe they had an internal crisis. Maybe the entire accounts payable team got sick with COVID. It’s anyone’s guess.
But we need to keep our emotions in check while we go through the process of getting paid.
It starts with you verifying your facts and collecting the information you’ll need to pursue payment. Here’s what you need:
- The date you sent the invoice
- The invoice’s payment terms
- The amount you’re owed
- Verification that payment wasn’t made already
If you’re beyond the invoice’s payment term (usually net 30 days), double-check your contract. What are the payment terms?
The contract’s payment terms determine whether your payment is late, even if you set different terms on your invoice. But if the payment hasn’t been made within the terms of your contract, it’s important to start pursuing payment.
First, not collecting revenue on time hurts your bottom line. To protect your business, you must be paid in a timely manner.
But also, if you don’t enforce your contracts, you are setting a precedent that could make it difficult to sue for payment in court. The fact that you don’t enforce a term indicates that you don’t care.
Step 2. Past-Due Invoice Email #1
Before getting upset or talking to your client, verify they got the invoice. Send a short past-due invoice email to check on its status.
Here’s a Sample Past-Due Invoice Email
Subject line: “Following up.”
Just checking on the status of invoice #[give the number]. I sent it over on [give the date]. Do I need to send it again?
Short and sweet does it. Notice also that this is a friendly email.
You may not get an immediate reply. And that’s okay. They need time to look into it on their end.
You might also get a snippy answer or excuse:
- We need to push back payment to next month
- Accounts payable is behind on other tasks
- We’re waiting on an approval
Regardless of their excuse, you’ve verified they have the invoice.
Step 2. Ask Your Contact to Help
Your contact is your advocate — especially if they need your services and want to keep you long-term. So leverage that relationship.
Reach out by phone, email, or social media and let them know that you haven’t been paid yet. Then ask them to help.
Now, it’s a waiting game. Give them a few days to a week to investigate the problem internally. In the meantime, make a note of when you reached out and what you said.
Step 3. Get in the Right Frame of Mind
You need to be in the right headspace. At this stage, you have to assume the best but prepare for the worst.
A late payment may be nothing. But it may be a red flag that the client plays financial games, putting you at a disadvantage.
And you need to decide how far you’re willing to go to collect payment.
There are pros and cons to “fighting” for payment. I use that term loosely, because it feels like a fight, even if you’re just sending a series of friendly emails.
If every payment from this client is late, you’ve already braced yourself for the ongoing calls and follow-ups that you know are coming. You know you have to push for prompt payment, but you also want to maintain a good working relationship. And you know, if you push too hard, you could lose the client.
It’s a hard balancing act.
And this is the head game.
Do you really want a client who doesn’t pay on time? Are they worth a monthly battle to be compensated for your labor?
Sometimes, yes, you do want the client. There’s value to having the logo on your website. Or you worry that you won’t be able to replace them.
Bottom line, you need to be okay with losing them. Because you must enforce your contract. You must also get paid, if only for your own self-respect.
Step 4. Past-Due Invoice Email #2
If a week has passed and you still haven’t heard from accounts payable or your contact, it’s time to send another late payment email.
Remember, this is your second past-due invoice email. So send it to accounts payable and your contact. Make sure your tone is polite but firm.
Use a direct subject line. Something like: Invoice #[put the invoice number]
In the body, give a quick summary of the sequence of events:
- You sent the invoice on [date].
- You followed up on [date] and were told [use their words here].
- You asked for help — and what happened.
Then make your request:
- It’s now been ## days.
- Is there any reason this can’t be paid right away?
Thank them, and hit send.
It may take a few days for them to respond. But at this stage, you don’t need to be patient. It’s okay to call or email frequently. Let them know you’re willing to pester them until they take action.
Step 5. Demand for Payment Letter
If you haven’t received payment yet, you may need to escalate the issue. You’ve given the client multiple notifications, and you’ve given them several weeks to resolve their issues and pay the invoice.
Send a Demand for Payment Letter only if you’ve done everything you can to push payment nicely. Your client won’t perceive this as nice. And they may cut you off after they receive it.
That said, you can’t sue for payment unless you’ve sent this letter. It’s your formal request for payment, in writing, and certified, so there’s no doubt they received it.
Here’s a template to follow. Be sure to amend the wording to fit your situation.
Demand for Payment Letter Sample
Address block, with the client’s company name and address.
To: [Client Name] Accounts Payable
On [date], I submitted Invoice #[give the number] for services rendered to [the team or division you work with], but it hasn’t been paid.
The invoice includes [description of the work you performed. Be specific, including the dates you submitted the work.]
[Tell the story of your attempts to get paid. You may copy-paste this from your last email.]
The invoice, which was due [put your payment terms here] is now ## days late. Still, I’ve received no response to my attempts to collect payment.
Please pay Invoice [number] in full immediately. If, for any reason, you don’t have the funds to pay Invoice 341, you may contact me to work out a payment plan.
Please note that if legal proceedings are required to settle this debt, this letter will be tendered in court as evidence of your failure to attempt to resolve this matter. Further, you will be liable for any court costs, attorney fees and damages, including punitive damages.
You must have proof that the Demand for Payment Letter was received. So it should be printed and signed. And it should be sent via certified mail so you can verify they got it.
Consider sending separate envelopes to each recipient: accounts payable, the CFO, and the Director of Finance. Again, you need to verify they received your letter before you can escalate the issue further.
What to Expect
Hopefully, you didn’t have to go through all five steps. And in most cases, you won’t. Friendly emails usually work.
If you did have to send the demand letter, you’ll very likely get paid after the client receives it. Trouble is, you may also get an angry response.
I know of one solopreneur who got a check with the words, “Never use this vendor again!” written across it in a black marker. Another never heard from the client again.
Sure they paid. But the working relationship was over.
Bottom line, clients don’t like getting their hands slapped. And they especially don’t like the threat of a lawsuit. That makes you a liability they can’t afford.
So send a Demand for Payment Letter only as a last resort. And make sure you’re okay with losing the client.
And remember, as scary as that may seem, it may be for the best.