Payment Reminders: How to Use Them Correctly?

Learn how to effectively use payment reminders for collection management in a B2B company. Discover how many reminders and when to send them, and explore other tools to enhance payment reminders' effectiveness.

Payment reminders are an excellent tool for collection management in a B2B company. Their function is to ensure a quick payment collection, guaranteeing a good cash flow.

But sometimes, a single reminder is not enough. Complementary strategies are necessary to achieve cordial collections and maintain customer relationships.

Keep reading to learn how to make the most of payment reminders and analyze which other tools can enhance them.

How many reminders should a company send for payment?

It may seem simple, but payment reminders must follow guidelines to reach a reasonable resolution. They're an essential part of a more comprehensive collection strategy and are critical in maintaining healthy cash flow for businesses.

However, balancing persistent follow-ups and respecting the customer's privacy is important. A well-crafted payment reminder should be polite and clear, outlining the outstanding amount, due date, and acceptable payment methods.

First reminder

The first payment reminder can be sent before or after the due date. This decision will depend on how each company operates.

For reminders sent before the payment date, use a cordial notice reminding customers of the due period. The message must differ from any claim since customers still have time to pay. It's designed to prevent non-payment due to forgetfulness, so a friendly treatment is recommended.

If you use reminders after the due date, sending them three days after is suggested. This reduces the risk of claims from customers who have already paid. It is also advisable to apologize if the payment has not been charged when sending.

Second reminder

The second reminder is sent when the payment has yet to be made. Send it if three days after the due date have elapsed, and no news of any kind has been received from the customer.

The words for this message should express firmness and clarity in claiming the outstanding invoices.

Third reminder

This reminder should be even more rigorous than the previous one. It can include the consequences of non-payment: from legal action to drastic decisions, like penalties or cessation of business activities.

Sending between 3 and 4 reminder messages is recommended. If customers don't respond to these communications, consider another strategy to make the payment effective.

How to improve the effectiveness of payment reminders?

Several tools can help B2B companies in the task of preventive collections. These options help to remind or claim the payment of monthly payments. Besides, they can help educate customers on healthier payment behavior.

• Sending automatic reminders. This can help keep customers aware of the payment and due dates. It saves a lot of time for the collection department while acting in a preventive manner.
• Allowing the consultation of the outstanding balance. Provide customers with information in an accessible way about the amount they owe.
• Schedule Past Due Date Alerts. If preventive collection tools don't meet their goal, send alerts on past due dates. This maintains communication with customers to resolve the situation and avoid legal collection.
• Incorporate payment links or buttons. Include a button or link that redirects customers to a payment gateway. This will simplify the process, allowing them to settle the debt in a few steps and in a transparent manner.
• Using collection management software. ERP integration can help reduce delinquency rates and lack of liquidity. This allows keeping up to date on the collection status of your customers with the details of the delinquency management carried out.

Effective resolution of non-payment problems relies on understanding how to address customers with payment reminders.

Can Paystand Help with Payment Reminders?

Paystand is a B2B platform with blockchain technology and a user-friendly interface that allows quicker, more effective, and more secure transactions. It helps manage past-due invoices, handle communication, and provide various payment methods.

Paystand ERP integrations ease client communication. You can send reminders before an invoice is overdue for payment or after to settle outstanding invoices.

If you need help with your collections, please don't hesitate to contact us! Book a demo with one of our experts and identify the optimal solution for your B2B needs.