Guide to Sending Effective Payment Reminders Online
While sending effective payment reminders online can sound draining, the process is integral to the success of your business.
Managing aged accounts receivable is certainly not the most fun part of the money making process. After all, you’re sitting around waiting for someone to pay up! But, sending effective payment reminders online will keep you from having to constantly hound people to pay past due invoices. By honing a few specific skills, your A/R follow-up will become a piece of cake.
Timing Is Everything
Effective payment reminders pay great heed to time. Days remaining until the due date, days past the due date, and the number of days in the payment term are all elements that you’ll need to include when sending payment reminders.
Be Proactive
Sending a payment reminder a certain number of days before a payment is due serves as a great reminder to your clients that they need to settle up. With some online bookkeeping software, you can schedule online payment reminders, which will be automatically sent to your client a certain number of days in the payment period.
But, don’t jump the gun. Reminding clients to pay you significantly ahead of the due date could leave a bad taste in their mouths. Some appropriate payment reminder intervals would be:
- Five business days before the payment is due
- One calendar week before the payment is due
- Two days before the payment is due
If you offer Net 30 payment terms, and send a payment reminder on day five, your client might think you’re hounding them for money. That’s bad for business!
Be Consistent
Hold fast to the payment terms that your client agreed to, and send a payment reminder within a few days past the due date. If you waver, your client may think you have lenient due date policies, and they’ll be more likely to pay late again.
Not to mention that 82% of businesses in the US that have shuttered attributed their failure to cash flow issues. In order to avoid becoming a statistic, hold yourself accountable for your A/R follow-up, and send effective payment reminders with strict regularity. Ultimately, the clients that you want to turn into repeats will respect your motivation to get paid.
Automate It
Effective payment reminders are low-maintenance, and streamlined for time management purposes. The minute you start customizing every payment reminder, the more money you’re losing. Take a more hands-off approach to accounts payable by taking advantage of automation.
Use Templates
Instead of wasting an average of 2.5 hours per day on email, take advantage of templates. Create a template that includes all of the information you need to send a payment reminder via email, and access it when you need to. When you start using templates, instead of typing out the same message over and over, you’ll have a mostly-complete message just a few clicks away.
Setup is a breeze!
Harness Your Software
If you use a bookkeeping software, it’s likely that that software includes automation functions. To find the automation potential hidden away in your software, you can:
- Explore your product’s user manual
- Search for an online tutorial
- Contact your product representative to ask about your automation options
Sending effective payment reminders may be even easier than you expected! If your (sometimes pricey) accounting software can do the work of accounts receivable follow-up for you, that’s the best tool you can find.
Final Thoughts
While sending effective payment reminders online can sound draining, the process is integral to the success of your business. One of your number one priorities as a business owner is to avoid cash flow problems, which are some of the hardest to solve. The effectiveness of your payment reminders plays a very significant role in your company’s success, and you can control just how impactful those reminders are.
Reminding your customers about upcoming due dates proactively, consistently enforcing your payment terms, using templates for reminder emails, and harnessing the automation power of your accounting software can all take your payment reminders to the next level. Keep your eye on the prize, and get one step closer to cashing a check!
