Collecting overdue or outstanding invoices doesn't really make anyone happy. But, as an entrepreneur, you have the responsibility to keep your cash flow healthy. Chasing your money when necessary is therefore part of that.
Moreover, the accounts receivable process is also part of your customer journey. It is therefore high time for the Customerry vision on tackling defaulters.
The basics: technical terms regarding collecting outstanding invoices
Before we move on to the practical application, I would like to provide some relevant terminology for this article. That way, we will all be talking about the same thing.
- Accounts Receivable Management : Everything you do regarding collecting outstanding invoices and ensuring customers pay on time. By this, we mean the entire process. From clear agreements made in advance, correct invoices, clear reminders, and, if necessary, an escalation procedure.
- Collection agency: An external party that collects outstanding amounts when your own follow-up does not yield (sufficient) results.
- General Terms and Conditions: You can view these as the ground rules for your collaboration with your clients. Think of payment terms, late payment interest, dispute resolution, etc. TIP: Write these in plain language and ensure that clients have actually seen and explicitly accepted them.
Why is customer-oriented collection of outstanding invoices so important?
Number one by far: a healthy cash flow. During busy periods, there is often a lot of money “in the air”: unpaid invoices, customers delaying payment, and projects that have not been fully invoiced. Slow payments literally cut off your oxygen supply. A well-organized, friendly, yet clear follow-up process truly makes all the difference.
In addition, a clear process brings calm to your team . No more vague hassle about who calls or emails when, but also no more frustration about how to handle defaulters or always having to make "the difficult calls."
Finally: customer-oriented accounts receivable management is about more than just money. We sometimes call it the forgotten shipyard of customer experience, but it really says a lot about your reputation and your style as a company. How you follow up on outstanding invoices is indeed an extension of your customer experience. A cool, distant payment email can destroy years of goodwill, while being too “loose” with overdue invoices undermines your professionalism.
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Five principles of customer-focused chasing your money
1. Make paying as simple as possible.
A customer who has to search for how to pay pays more slowly. So ensure that every invoice makes it clear at a glance what, when, and how to pay. Add a payment link or QR code so that payment literally takes just one click. And, this is probably going to sound silly, but make sure your invoices arrive at the correct (digital) address.
2. Clear agreements in advance are half the battle.
Customer focus starts with clear agreements. Discuss your payment terms and your follow-up process before sending the first invoice. That might sound businesslike, but it does create clarity on how your company collects outstanding invoices. Additionally, write your terms and conditions in plain language, and ensure that the customer has truly read and understood them.
3. Don't wait because you don't like doing it.
The biggest mistake? 'Just a few more days and then I'll send an email,' or 'they'll probably pay eventually, won't they?' I get it; debt management is a bit like going to the dentist, but by waiting too long, you make things unnecessarily difficult for yourself. Ensure a clear process with a fixed follow-up rhythm. Are you wondering what timeframes are typical? That really depends on your sector and target audience, and we would be happy to discuss this with you during an introductory meeting.
4. Be hard on the facts, but soft on the person.
For some reason, payment reminders either become a kind of incomprehensible legal jargon, or they unnecessarily insult and threaten the customer. A customer does not need to be snapped at to pay. A simple, friendly, but clear tone can work just as well. Start with a question and an acknowledgment (“it can happen that something gets overlooked”), then provide factual information (“this concerns invoice X of €Y, due date Z”) and offer choices (“pay immediately via this link or let me know if something gets blocked”).
Extra tip: Do you struggle with delivering bad news to customers? Then consider a customer-focused communication training for your team!
5. Escalate clearly and consistently.
Is there no response to your initial inquiry? Then feel free to be stricter, as long as you announce this and provide substantiation. In every communication, state what the next step is if there is no response. Keep a logbook of all contact attempts and stick to the facts. And if you ultimately have to switch to external help, such as a lawyer or collection agency, do so correctly and without drama.
Customer-oriented accounts receivable management is therefore not about being “soft”. It is about collecting outstanding invoices in a clear, respectful, and consistent manner.
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Take the test: how customer-oriented is your approach to outstanding invoices?
Take an honest moment to reflect on how you handle outstanding invoices today. Review the three questions below and discover whether your accounts receivable management is both customer-oriented and efficient.
1. Are you postponing the succession because it feels uncomfortable?
You know you need to follow up, but you keep putting it off. “I’ll call tomorrow.” Sound familiar? Waiting a week reduces the chance of payment and increases the chance of frustration. Customers forget, you get annoyed, and before you know it, the invoice is 45 days old.
Specifically: Do you have a clear process with a fixed rhythm, and is that process known by your team?
2. Are you too strict or just too lenient in your communication?
Sometimes your message sounds harsh and distant: “Please pay immediately or else...” The next time, you are too understanding: “No problem at all, I completely understand if things are a bit more difficult right now.” The result? Customers no longer know what to think of you.
Specifically: do you use a tone that is warm but consistent, do you have fixed templates, and do they align with the rest of your customer experience?
3. Does everyone on your team know who does what?
Accounting thinks sales should make the calls. Sales says that undermines my relationship with the customer; can't customer service do that? Customer service has no mandate and therefore comes back to you for every file. The result: a frustrated entrepreneur who, in the worst-case scenario, has to follow up on every single file themselves. And in the meantime, no one does anything, or everyone does something else. The result? Missed opportunities and unclear signals to customers.
Specifically: is there one clear owner of the process? And does everyone know which steps and messages belong to it?
How do you score?
Finally: what if being customer-focused doesn't work? Tackling non-payers.
Sometimes your standard process is insufficient. In such cases, it is important to remain calm and consistent and, however difficult it may be, not to let your own emotions get in the way. First and foremost, distinguish between loyal customers who are temporarily experiencing cash flow issues and genuine defaulters. You can help the first group with a payment plan. The second group requires a different approach.
My advice: switch to external debt collection and/or legal advice in time, before both parties are entrenched and reaching an agreement becomes too difficult. Also ensure that your collection partner's style suits your company, because for the client, it is still about your name, your brand, and your reputation.
![Customer-oriented debt collection via Customerry]()
Conclusion:
Collecting outstanding invoices in a customer-oriented manner is not an impossible task. Clear agreements, a consistent rhythm, and clear yet warm communication ensure a healthy cash flow and a clear reputation.
Do you also need customer-oriented payment reminders?
At Customerry, we help entrepreneurs and teams communicate in a customer-centric way – even in challenging situations such as collecting outstanding invoices or handling complaints. Feel free to contact us, and together we will explore how you can collect your invoices faster and in a more customer-focused manner.
