Finance - following up on an overdue invoice
Late payment costs you cash. A process costs nothing.
Step by step
- Identify Overdue InvoicesInvoices
Generate an aging report and flag all invoices past their due date by one or more days.
- Day 1-3 Written ReminderInvoices
Send a professional email reminder with the original invoice attached, stating the invoice number, amount, due date, and payment method.
- Day 7 Phone Follow-UpMentions
Call the customer to confirm receipt and identify any query or process issue holding payment. Log the call outcome in writing.
- Day 14 Formal Written NoticeMentions
Send a formal notice referencing all previous contact attempts and stating the consequence if payment is not received within 5 working days.
- Dispute ResolutionInvoices
If the customer raises a query, investigate and respond in writing within 2 working days. Issue a credit note or corrected invoice only if the dispute is valid.
- Day 30 Escalation DecisionInvoices
Decide whether to suspend credit, issue a formal letter of demand, or refer to a collections agency based on payment history and relationship value.
- Account Record Update and Accounting SyncXero
Log all contact attempts and outcomes in the account record. Sync outstanding balance status with accounting software.
What this workflow solves
- We have overdue invoices spread across multiple customers and no clear view of who needs chasing or how urgently.
- By the time we notice an invoice is overdue, it is already 30 or more days past due and the customer has moved on.
- We chase payments by memory and email with no central record of contact attempts, making disputes difficult to resolve.
Frequently asked questions
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