There are few things more frustrating in credit control than a customer who simply stops responding.
They answered your emails when you were discussing the work. They were easy enough to get hold of when they needed something from you. Perhaps they even replied to your first payment reminder and told you the invoice would be sorted.
Then nothing.
You send another email and get no response. You call and leave a message. Another week passes, the invoice gets older and you're left wondering whether to keep chasing, become firmer or accept that you're being ignored.
Unfortunately, sending the same polite reminder every seven days isn't likely to suddenly produce a different result. Once a customer has stopped engaging, your approach needs to change.
First, make sure there isn't another reason for the silence
Before assuming a customer is deliberately avoiding you, it's worth checking the basics.
Is the person you've been contacting actually the right person to deal with payment? Are they still with the company? Could they be on annual leave or long term absence? Does the business have a separate finance team or accounts email address? Have your previous emails included everything they need to identify and process the invoice?
If you've only ever contacted one person, try another route into the business. A phone call to the main office can sometimes tell you more in five minutes than another week of unanswered emails.
I would also check whether there has previously been a query or dispute that hasn't been properly resolved. As I talked about in my recent blog about unresolved invoice queries, sometimes an invoice isn't moving because something is preventing payment rather than because the customer has simply decided not to pay.
Once you've ruled those things out, though, repeated silence needs to be treated differently.
Don't let your follow up become background noise
One of the easiest habits to fall into is continuing with exactly the same approach because you don't know what else to do.
“Just following up on the below.”
“I wanted to check whether you have an update.”
“Please could you confirm when payment will be made?”
There isn't anything inherently wrong with those messages, particularly at the beginning of the process. But if you've sent several of them without a response, another one probably isn't going to change much.
At that point, I would make the communication clearer. Refer to the amount outstanding and how overdue it is, summarise the attempts you've already made to contact them and ask for a response by a specific date.
That doesn't mean jumping straight from a friendly reminder to threatening legal action. There is plenty of room between the two.
It simply means making it obvious that the invoice hasn't disappeared from your radar and that you now expect the customer to respond.
Use more than one method of contact
Email is useful because it gives you a written record, but credit control shouldn't necessarily happen entirely from your inbox.
If somebody isn't replying to email, call them.
If you're repeatedly going through to voicemail, try the main business number rather than a direct line. If there's a finance department, speak to them. If your original contact isn't responsible for approving invoices, find out who is.
This is particularly important if you've had a good relationship with the customer previously. A conversation may uncover something you weren't aware of, and it's often much easier to get a clear answer over the phone than through another chain of emails.
Keep a record of those conversations too. If somebody tells you payment will be made on Friday, note it and check on Friday. A promise to pay isn't the end of the credit control process. The payment actually arriving is.
Decide when enough is enough
There comes a point where an unanswered invoice needs to move beyond normal reminders.
Where that point sits will depend on the circumstances. A customer who has always paid reliably and is unexpectedly a few days late is very different from somebody who is months overdue and has ignored numerous attempts to contact them.
The value of the invoice matters too, as does anything you've learned about the customer's financial position and whether there is a genuine dispute.
What I wouldn't recommend is allowing an invoice to drift indefinitely simply because deciding what to do next feels uncomfortable.
If you've exhausted your normal credit control process and the customer still isn't engaging, your next communication should make it clear that the matter is being escalated. Depending on the circumstances, that could ultimately mean considering statutory late payment interest and compensation, formal debt recovery or legal action.
If you're considering legal action, make sure you understand the correct process and take appropriate advice where needed. The important point from a credit control perspective is that there should be a point at which an account moves from ordinary chasing into a more formal stage.
Otherwise you can still be sending “just following up” emails six months later.
Be careful about continuing to provide more work
This is one of the areas businesses sometimes overlook.
If a customer already owes you money, isn't responding to you and continues asking for more work, think carefully before allowing the outstanding balance to grow.
There may be good commercial reasons to continue in some circumstances, and every customer relationship is different. But continuing to extend credit without addressing an existing overdue balance increases your exposure if something is genuinely wrong.
Your terms and internal processes should make it clear what happens when an account becomes significantly overdue. That might include putting further work or orders on hold until the account is brought up to date.
It is much easier to have that conversation when it is part of a normal business process than when you've allowed the balance to build for months and finally reach the point where you can't ignore it anymore.
Silence is information too
You won't always know why somebody has stopped replying.
Sometimes they're busy. Sometimes there's an internal problem. Sometimes cashflow is tight and they're avoiding a conversation they don't want to have. And occasionally there may be a much more serious problem developing within the business.
You don't need to guess which one it is.
You do need to respond to what you actually know: an invoice is overdue, you've made reasonable attempts to resolve it and the customer is no longer communicating with you.
That's enough to justify changing your approach.
Good credit control isn't about bombarding customers with emails until they finally give in. It's about knowing what is happening with your invoices, following up consistently and recognising when an account needs to move to the next stage.
At INcharge, we manage that process for our clients, from the normal day to day follow up through to dealing with queries, tracking payment promises and identifying accounts that need firmer action.
Because if a customer has stopped answering, simply sending the same reminder again isn't a credit control strategy.
Find out more about our outsourced credit control services and pricing.