Talk to Sales:
Sometimes people need a nudge that reminds them to pay you.
But wasting hours sending emails or making phone calls just to follow up on unpaid customer invoices can be a mistake.
This is where having a payment reminder strategy can help you get paid faster and save time.
In this article, we show you some payments solutions and ways to create payment reminder sequences.
Read on for more.
A payment reminder sequence is a technique or way of sending multiple, recurring payment reminders. For payments, a reminder sequence will often revolve around a payment due date or an overdue payment that needs to be made in a certain amount of days.
Payment reminder sequences are often triggered based on the following invoice timeframes:
A payment reminder sequence will generally stop once the person who owes you money takes action, such as paying their invoice.
Example of a net 30 payment reminder sequence:
Calling, texting, email, and physical mail are some of the best ways of reminding someone to pay your business. But which one is right for you?
Bottom line, there are pros and cons to every option you pick. Ideally, you would use a combination of methods to reach your customers.
As in our payment reminder sequence example, for days 1 and 5, there is a text and an email that gets sent to the customer with a link to the invoice.
And on day 30 they get a phone call since they haven’t paid you yet through any other reminder.
You can use a multitude of different options that work together in a sequence, but ultimately your customers will often respond better to one method over another.
However, every customer has a different messaging preference, which is why having a unified conversational messaging strategy is important.
Nothing is as personal and human as a telephone call. But voice calls have long been declining and some 76% of customers dislike talking with businesses on the phone.
And when it comes to payment reminders, phone calls just take too much time. Imagine having a bunch of customers and having to call each of them multiple times just to collect payment.
But phone calls do have their place despite their shortcomings. They’re often the best last-ditch effort for collecting payment and should be used when you’ve exhausted all other options.
Texting is one of the best ways to send friendly payment reminders.
People read their texts almost immediately. Payment reminder texts are also easier than making calls, emailing, or sending mail.
Texts boast better engagement rates than any other form of payment reminder too. We’re talking up to 98% open rates, 45% response rates, and around 3% spam rates.
Your customers would prefer you text them too.
Late payment text messages are also less time-intensive on the part of the sender. And payment follow-up reminders that contain payment details and a link to a payment portal make it easy for your customer to pay right away.
This commonly gets referred to as Text-to-Pay.
Text-to-Pay is a way to request payment and pay by text message. Text payments can be made by simply following a link in a text message. It requires your business to have a payment portal or payment collection system set up.
Payment reminder SMS templates:
“Your invoice is due for payment by 5 o’clock today. Please feel free to pay via check in person, or pay via this link: http://msgdsk.io/l/w/ev7JhUol”
“Your payment is now a day overdue, please pay as soon as possible to avoid additional late fees”
“An overdue invoice has been on your account for longer than 10 business days. If not paid within 24 hours, a collections agency will be assigned to collect the outstanding balance.”
Suggested Resource: Free Text Message Templates
Email is the tried-and-true way of sending payment reminders. It’s always a best practice to use email, but payment reminder emails can suffer from low open and engagement rates.
Emails have around a 20% open rate, 6% response rate, and 53% spam rate.
Yes, email can provide more space for telling a visually appealing story. But payment follow-up reminders are often brief and don’t require much space.
Email is also nearly free, so there isn’t really any downside to using it. Just be aware that if it’s your only method of delivering payment follow-up reminders, it may prove ineffective.
Debt collectors have long used physical mail to send payment reminders.
One of the main reasons for mail being used so commonly in the financial sector is the fulfillment of legal requirements. But for many small businesses, there’s no reason to go through the trouble of sending a letter.
Then there's the cost issue. Standard postcards can cost between $70 and $100 per 500 cards – depending on the supplier, printer, color, volume, and personalization.
Mailed letters pros:
Mailed letters cons:
The best time to remind someone to pay you depends on your payment process and payment terms. Businesses and organizations that collect payments on net 30 payment schedules should create payment reminder sequences that start weeks in advance.
Want customers to take immediate action? It’s a good idea to send a payment reminder with a clear call to action once you’ve rendered the product or service.
Running a cashless business with software, payment portals, integrations, and automation can also aid in this process and help you determine when to send a payment reminder.
But every business and customer relationship is different, so there's no one-size-fits-all timing.
The number of payment reminders you send also comes down to your product or service and customer preference. Overall, the efficacy of reminders tends to decrease as you send more.
So it's best to determine the optimum payment schedule (net 30, net 15, net 10, etc.) for your business and customers.
Regardless, you’ll always want to be mindful of business messaging etiquette in the context of good customer service and your conversational messaging strategy.
Small businesses often think automation makes things complicated and requires a lot of effort and technical knowledge. This isn’t necessarily true.
Automation actually frees up time and increases overall business efficiency. That translates to more revenue and reduced accounts receivable.
Many payment reminder apps and business text messaging software make it easy to set up automation with just a few clicks.
But why should you automate your payment reminders in the first place?
You’ll develop a payment reminder process.
Automating your payment reminders forces you to think about your collections process.
Start by studying your current process and look for opportunities. Maybe you’ll find that the best time to send a reminder is right after an invoice gets created? Maybe you’ll find that it’s after an invoice is over 5 days unpaid?
Regardless, studying your process and thinking in terms of automation leads to greater efficiencies.
This also means that you can automate your reminder sequences to kick off when you need them to.
Most email and texting software worth its weight make it easy to create sequences of messages that kick-off after an invoice hasn’t been paid by its due date.
Suggested Article: The Ultimate Guide to Automated Text Messages
As mentioned above, integrations are key to automating your payment collection.
If you’re using small business accounting software like QuickBooks Online or Xero to create invoices or do your bookkeeping, then text messaging apps like MessageDesk make it simple to automate payment reminders.
Of course, you can always manually send emails or text messages to your customers who have an invoice due.
But consider the time savings with set-it-and-forget-it text messaging software. With the right app, all you have to do is set up automatic text messages and watch as you get paid.
Automating any of your day-to-day tasks saves you time.
When most outstanding payments get taken care of automatically you can spend your time tracking down the ones that need more persistence. All of the outstanding invoices that would normally go unpaid due to a human error (“I forgot”) get taken care of without effort.
Preventing human error is all the more reason to automate payment reminders. It’s just as easy for you to forget to send payment reminders as your customers forgetting to pay.
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