InvoiceBerry Blog

Our thoughts & tips on small businesses, freelancers and sole traders

10 Tips on Sorting Out That Unpaid Invoice

Written by on May 04, 2015

Getting your invoices paid on time is something, every now and then, almost all businesses face. Unfortunately not all clients and customers are particular about clearing payments immediately when they are due and some often have to be nagged to the point to which charges and fines apply. This guide will help you deal with such customers more efficiently in hopes that you won’t have to suffer much because of unpaid invoices. We all know as small businesses, how important it is to maintain a steady flow of cash and how these customers can really bring a blow to it.

What really makes unpaid invoices tricky business is the fact that, we as small businesses, ideally wish to keep on friendly terms with our clients and customers and keep them happy. Thus when it comes to chasing unpaid invoices, there seems to be no friendly way of saying, payment has to be made by this date or else you will face a fine.

So this guide will help you get your invoices paid on time while still maintaining a healthy friendly relationship with your clients and making sure they are not annoyed by your continuous payment chasing.

1. Set expectations in advance

As with any new customer or client, make sure you make them aware of your payment terms well in advance. Ideally it is best to go over your payment terms before your customer or client purchases your product or service. In a clear manner, let them be aware of when and how your invoices should be settled. This could be immediately when the product or service is delivered, at the end of the month or even quarterly.

2. Warn in advance about late payment penalties

This is another crucial point. Just because you are a new company, does not mean you should not have strict rules and regulations. You should definitely set terms for late payments and decide by what percentage you will charge your customer for each day they are late by. Then also make sure this is clearly communicated to your customer before they make a commitment of purchase with you. You might not be aware of this, but the government actually has a legislation to protect small companies against late payers. This legislation defines that you are allowed to claim an 8% interest on an unpaid invoice over the base rate while also adding in any reasonable debt recovery costs. Therefore, it’’s not a bad idea to keep yourself up-to-date on all the laws and regulations that apply in your state or country. This way, if things do go bad, at least you know what your options are.

3. Set up a good accounting system

Having a solid accounting system will make your life so much easier. Even small business should certainly looking into invoicing systems like Invoiceberry that help start-ups and small companies with basic needs, keep everything running smoothly. Online invoicing systems like these help you create professional looking invoicing, adding your company logo, making sure all your client contact details are stored and fully integrated into the invoice and all terms and conditions are highlighted. This will help you keep on top of things, quickly make amendments when necessary, and even send out customized invoices within seconds.

4. Mark down when to start chasing payments

Say for example, you had a 30 day payment period which has passed and you still haven’t received any payment for your client. Ideally you might want to give your client another few days before you chase them. Especially if this is their first time being late. They might be late because of their own cash flow, and you being considerate of that will put you in a stronger position. So give it a few days before you take any further action in terms of chasing your client for payment.

5. Don’t jump to assuming the worst

When you send out that first payment reminder, try to refrain from the usage of any angry language. Don’t jump to assuming the worst that they are pulling back on purpose. It might simply be because they forgot. Something that happens quite too often with all of us.

6. Always send friendly emails

When it’s finally time to send out that first payment reminder email, try sticking to a friendly tone and make sure you always attach the original invoice again to your email reminder. Do point out in your email how many days late they have been but while keeping friendly. This way you won’t be offending your client but will still be highlighting to them the fact that they are late by a certain number of days before you actually contacted them. Again it puts you in a stronger position and helps strengthen your relationship with customers and clients.

7. Proceed with a statement

If sending a friendly email reminder did not work, its time you send them a statement. But again make sure that you send another friendly email while simply attaching the statement along with it and highlighting to your client that a statement has been issued as they are overdue for payment. Again refrain from getting angry or aggressive in your email.

8. Use the phone

If after following all of the above steps, you still fail to receive anything back, it unfortunately is time to pick up the phone. Here again my advice will be to not get angry over the phone but to ask in a friendly manner if they are facing any trouble with making the payment or if there is some sort of issue with the payment. This will immediately put your client in a position in which they will have to answer “yes” or “no” thus clarifying the situation. This step usually helps determine whether you will need to take the next step or not.

9. Use last resort method

If your phone call still did not make your client clear your invoice, it is time to charge them interest on the debt. But do make sure that this is something that you have warned them will happen in advance. If you did not, then check with what the laws in your area state. If there are any legislations allowing you to charge a certain rate of interest, then go ahead and do so while quoting that legislation to your client for support.

10. Hire someone to chase your payment

Finally, at this point, it is best that you leave the task for further chasing to someone else. There are professionals out there that work solely for chasing people to clear invoices. They are trained in the area and know exactly what measures to take in order to get your payment in. this will clear you from having to deal with the drama so you can focus on other clients.

Hopefully you won’t have to follow through to the tenth step in order to get your unpaid invoices cleared. However, if you do end up with such a client, at least this guide has equipped you with all the necessary steps you ought to take before heading for a last resort of hiring professionals to chase invoices.

The Ultimate Social Media Tool

Download our free guide to learn how to create shareable content, generate website traffic & increase conversions.


  • Point 10 – Don’t be afraid to outsource this. A customer who pays late is not a good customer and not worth the hassle you are having!

Ready to start invoicing your clients with InvoiceBerry?

Sign up to our Forever Free account. Yes, it's really free.

Don't leave us yet!

Subscribe to our weekly digest!

Sign up to our newsletter to receive our weekly email digest every Friday morning and read about the best freelancing and small business articles on InvoiceBerry.

Read previous post:
These 6 points are must-have for any freelance invoice
6 Must-Have Points on Your Freelance Invoice

Have you started working as a freelance without proper clauses on your invoice? Probably yes! A lot of freelancers often...

Close