How to Handle Late Payments Without Damaging Relationships

Creating the right steps to avoid late payments, and how to encourage customers to pay on time.
Handling late payments

No organization wants to deal with late payments, but they’re an inevitable part of the business. When they happen, it’s essential to handle them so that they don’t damage relationships with patrons. Here are some tips for securing payments without alienating customers, presented to you below by

Follow Up Fast on Late Payments

The sooner you follow up on a late payment, the less likely it will damage your relationship with the customer. Send a quick email to remind the customer of the balance due, and be sure to include a link to make it easy for them to pay online. If the payment is still late, call them, remind them of the balance, and stress how important it is to take care of it immediately.

Customers appreciate this kind of follow-up and will often pay the balance in full if they have the funds available to do so. Make sure you thank them for paying on time and follow up regularly with any customers who have a history of late payments.

Make Invoices Mobile-Friendly

When customers have to hunt for the information on their invoices, it can cause them to miss payments. If you haven’t already, switch your invoices to a mobile-friendly design that lays out the due date and amount. This will help customers stay organized and on top of their payments. Ensure all contract terms are clear. For bills sent as a PDF file, use a PDF compressor to keep the file size low.

Use an Automated Late Payment Reminder

If you have a lot of customers with late payments, it’s challenging to keep track of all of them. An automated reminder system can be a great tool to help you stay on top of late payments. If you have an app, offer the option to pay through it. This means that customers can pay their balances without calling or emailing you first. Make sure your app is secure and provides bank account authentication. Most payment apps work with any ACH processor and allow you to link to your customers’ accounts while maintaining total security.

Use Incentives to Encourage Early Payments

One way to prevent late payments is to incentivize customers to pay their bills early. For example, this could include a discount for customers who pay within a specific timeframe or a bonus for those who settle their entire balance in full.

You can also offer exclusive deals or rewards to customers who make early payments. Customers will be more inclined to pay their balance in full if they know it will get them closer to an exclusive deal or a freebie.

Create a Flexible Payment Plan

Another way to avoid late payments is to give customers the option of a flexible payment plan. This step could mean breaking the charge down into smaller installments or setting up a payment schedule that works for their budget.

Customers appreciate the flexibility and will be more likely to take advantage of a payment plan that works for them. It also shows that you’re willing to work with them and puts them in a better position to take care of their balance.

Help Customers Make On-Time Payments

A few changes, such as incentives for early payments, mobile-friendly invoices, and an app for making remittances, can improve your accounts receivables.


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