There’s probably a long list of tasks you’d rather take on than following up on unpaid invoices.

Chances are, that’s because it can involve uncomfortable conversations. According to one study, 77% of business owners worried about damaging client relationships when chasing late payments.

But a system for tracking unpaid accounts can help make collections less stressful and less costly. In fact, firms that have high collections performance can save 4.6 times more on managing collections than firms that don’t have their collections process down pat.

Below are 3 ways you can make overdue payments less of a burden on the team (and on your cash flow).

1. If you feel overwhelmed, segment customers by value at risk

One rule of thumb is to segment overdue invoices by value at risk rather than on days overdue. Having separate, higher-touch approaches for larger invoices can be a better strategy when collections become overwhelming.

You can also use this approach to separate ownership of the collections process. For example, you might have an admin person on staff who can follow up on smaller invoices, and then decide to handle a few key clients on your own.

Alternatively, you can use these segments to determine what automation strategy you employ for collections.

2. Automate wherever possible

Automatic invoice reminders in Quickbooks are one approach, but Quickbooks doesn’t let you turn off this feature for some clients – meaning you have to apply this automation across the board or not at all.

However, you can create automated email sequences with tools like Customer.io and Mailchimp to follow up on invoices for specific client segments. The advantage of this approach is that you can take them off the list to handle their accounts manually if necessary. 

That way, you can personalize your outreach efforts when things get challenging without sending redundant emails.

Fortunately, you don’t have to write difficult emails from scratch either. One of the great uses for ChatGPT, Gemini, and other AI tools is that you can design prompts to automate collections drafts and then edit them for a personal touch.

For better invoice tracking, use practice management software like ProCharted to track billing and payment status right next to your workflows and CRM.

3. When you don’t hear back, switch tactics

When you don’t hear back, a high-touch approach doesn’t necessarily mean more emails. First, you could try:

A different channel: Maybe you’ve been emailing a client that just doesn’t check one of their email addresses that often. Double check your client management system to see if they have a preferred communication channel, or if there are other channels (like LinkedIn messenger) that you might try.

Try a different contact: For larger clients, you might try to see if there’s a different contact on the team to reach out to. The CFO might have hired you, but maybe they forgot to give you the contact info for an AP person that manages payments.

Try a different tone: This is another area where generative AI tools can really come in handy. If you’re used to using a very friendly tone, you can prompt the AI to modify your message to be more firm, more detailed, or more nuanced to troubleshoot the best communication tactic.

If all else fails, you may need to have a more frank conversation with your client, ideally either over the phone or in person.

Take heart: tough conversations can actually improve rapport

Eventually, you might hit a threshold where you have to either take the issue to a collection agency, take legal action, or stop work for a client. Before that happens, you should spell out in clear terms the consequences your client will face if they don’t pay you.

That’s the ultimate tough conversation to have with a client, but there’s a trick to getting it right: know what you want, stay objective, and be curious.

Going into the conversation with an objective and curious mindset can help you find a solution that’s mutually beneficial. It’s tempting to make negative assumptions about why clients haven’t paid you, but the truth could be a lot of things: maybe the client is transitioning to new software, or has had a recent financial crisis.

Knowing what you want can also help you stand your ground if you tend to capitulate to client requests. Decide beforehand how much leeway you’re willing to give the client before you take more serious action, and gently stand your ground.

Being understanding during a difficult conversation will speak volumes about your professionalism – and better yet, it can help you forge positive relationships with clients in a tight spot. When your process is organized and efficient, you’ll also be much more capable of taking an objective and fair approach.

Start your 30-day free trial with ProCharted today to see how client management software can streamline your billing process and client management.