Have a pre-planned communication strategy

Here is an example of how to deal with overdue customers

It’s all about having a disciplined and structured communication path for chasing overdue customers. Here is a good process that can be implemented:

If a customer is 2 Days Overdue: send email;
If a customer is 7 Days Overdue: send 2nd email;
If a customer is 11 days Overdue: make a call and impose credit hold (i.e. no new invoices can be issued);
If a customer is 17 Days Overdue: send email stating account on hold and interest might be chargeable (as per our terms);
If a customer is 25 Days Overdue: make a call again and suggest legal action is pending;
If a customer is 35 Days Overdue: final email before legal (often escalated to management) 45 Days Overdue: demand letter sent

This is just an example of an effective workflow, and you need to make sure to personalize these steps to find your place of business and make sure the same steps are followed every time for every customer. Keep in mind that as the owner of the business, you might want to do your best to stay out of this loop, as it’s very hard for an owner to be the ‘sales’ face and also the ‘debt collection’ face.