Debt recovery procedure
These steps can be used as an escalation process to contact your customers about an outstanding payment from friendly reminder through to letter of demand and bad debt collection.
1. Contact with a friendly payment reminder
Once the payment is overdue, phone, email or mail the customer with a courtesy reminder. The customer may have forgotten, paid into the wrong bank account or another minor issue and your contact will be enough to get the invoice paid. Include your payment options, banking details and contact information to make it easier for your customer to pay you quickly.
2. Contact with an overdue payment reminder
If the payment remains outstanding and the customer has missed the next agreed payment date, or there has been no contact, phone the customer or send another email or letter reminder of the money owing and request payment.
3. Contact your customer with a final notice
When the customer has not paid as per the terms of payment, and has missed any extended payment dates again call or email them to discuss the outstanding invoice and request payment.
4. Try to make direct contact with your customer
If there is still no payment or response, consider visiting the customer in person to ask for payment. This sometimes helps create a personal relationship with the customer that could be useful for future payments.
5. Send a formal letter of demand
In the event that all attempts to contact them have failed, consider sending a letter of demand. This should be only done as a last resort, as it can damage your relationship with the customer.
If you still haven’t been paid, then may consider using a debt collecting agency to collect the outstanding money from your customer.