Effective B2B Payment Reminders: Templates, and Strategies for Faster Payments

Many businesses can significantly improve their cash flow by implementing more effective strategies for collections, including adopting more strategic approaches to accelerate B2B payment of invoices . One of the simplest yet most overlooked ways to enhance invoice collection is by taking a proactive approach to sending payment reminders to ensure timely follow-ups and encourage prompt payments.

How Effective Payment Reminders Can Improve Cash Flow

Effective payment reminders help businesses save time and resources involved in chasing after customers for invoices. Since most customers (around 85%) want to pay businesses on time, effective payment reminders allow your A/R teams to “set and forget” these customers while focusing on the other 15% of customers with more complex issues. This approach gives your A/R team an easy opportunity to focus on high-impact tasks which quickly generate cash flow.

Additional tactics for effective payment reminders include:

• Sending dunning emails with enough lead-up time. Some businesses wait until close to the due date to send invoices and some even wait until the invoices are actually due! Then they only follow up with a reminder to pay the invoice after the invoice is due. Sending a payment reminder for business at scheduled periods well before the due date proactively encourages the timely payment of invoices. Not giving enough lead time is pretty much setting you and your customers up for failure.
• Automating the business payment process. Many businesses turn to B2B payment automation, which includes automated payment collection reminders to manage the tedious and resource-heavy process involved in manually managing different payment schedules, segmenting audiences, invoice processing, and payment reconciliation.
• Improving customer management. An automated payment process accelerates the payment process while eliminating payment friction and human error, delivering customers a better experience and higher satisfaction with your brand.
• Optimizing credit management. Being able to monitor your customers and weed out the risky ones helps ensure a steady cash flow. To do this, you want to set proper credit limits according to the level of risk each customer poses to the business and periodically review creditworthiness.

Best Practices for Sending Effective B2B Payment Reminders

There are a number of B2B collections best practices your business can incorporate to accelerate the payment process, some of which are only possible once it has an automation software in place. Others can be implemented even if you still rely on manual collections and payments processes, but it can become more challenging as your business scales.

These best practices include:

• Simplify paying invoices. Make it as easy as possible for your customer to pay you by offering various payment options  (e.g. ACH, debit or credit cards, electronic wallets). Offering a customer-facing payment portal makes paying you very smooth because the customer doesn’t need to know your bank account information and is less likely to make a mistake that will prevent you from reconciling the invoice later. Offer specific payment plans tailored according to their needs and potential incentives to encourage early payment.
• Automate workflows. Automate reminders and both internal and external escalations with pre-written collection email templates, creating robust workflow triggers set at specific timed intervals. For example, you can schedule it to be sent a specific number of days before or after an invoice is due.
• Leverage past data to improve A/R collections performance. Learn which message performed best and which scheduled time was optimal for different audience segmentations.
• Include all invoice information in the B2B payment reminder. Information about the invoice date, due date, payment details, account information, where and how to pay, and any other information that  prevents miscommunication that leads to disputes.

Types of B2B Payment Reminders and When to Use Them

Effective A/R collections and automated payment collection reminders in particular rely on pre-written templates that can be easily customized to scale the dunning process while controlling scheduling times as well as audience segmentation. Having a structured approach to B2B payment reminders helps A/R teams save time and gather enough collections data to enable them to determine which messaging performed the best.

Different types of B2B payment reminders include:

• Proactive payment reminders before the due date. Simply sending a payment reminder two weeks to one month before the due date of the invoice can be all that is needed for your customer to remember to pay your business. The reminder should include important information about the invoice, including the invoice date, due date, payment details, account information, and any other outstanding invoices. In some cases it might make sense to send more than one reminder, but the tone should be friendly.
• First reminder to pay invoice 14 days after the due date. After a payment reminder is sent and your business is still waiting to collect the invoice, a proper dunning email should be sent. It should include all payment information, payment terms, and assume that the customer is acting in good faith and simply overlooked the invoice.
• Second reminder to pay invoice 30 days after the due date. Once the due date passes, you can send a follow-up reminder. It should offer customers a last chance for payment, either a specific payment plan such as multiple payments over time or extension of the deadline subject to approval by management. It should also include the steps that will be taken if payment is not made soon, such as legal proceedings or the hiring of a collections agency to collect the invoice.
• Final collection letter. After two reminders, a final collection letter should escalate the invoice both internally (e.g., Head of A/R) and externally (e.g., Accounts Payable). At the same time, you also want to keep the lines of communication open to maintain a good relationship for the future. It should also be clear what will happen if payment is not received.

How Gaviti Helps Businesses Send Effective B2B Payment Reminder Emails

Many businesses, especially those looking to scale their collections process, have turned to accounts receivables automation software solutions to streamline their collections, including their B2B payment reminder emails. Gaviti’s autonomous invoice-to-cash A/R management solution takes this a step further, delivering you a technology that can perform A/R tasks on its own, without needing constant human control or supervision.

Its platform delivers benefits such as:

• Personalized and automated dunning workflows that send reminder emails before an invoice is due, optimizing how specific audiences receive which reminder and when, significantly increasing engagement and improving the chance of timely payments.
• Centralization of A/R data that integrates with financial systems such as your CRM, ERP, and accounting software to gather A/R accurate and up-to-date A/R data. With this information, you can implement a data-driven approach that helps improve your dunning performance over time.
• Full visibility of dunning performance to deliver all A/R stakeholders a clear view of every step of the dunning process, including the ability to see which messaging is more successful based on past results.
• Streamlined credit management that quickly manages customer risk and credit threshold with relevant information collected from relevant sources and a suggested credit limit for the reviewer to allow them to perform a sanity check.
• A Self-Service Payer Portal that enables customers to conveniently make payments online 24/7 with a variety of payment options including ACH, electronic payments, check, debit and credit customers, and more. Customers can also use it to view invoices, payment history, and any customer credit requests.

Want to learn more about Gaviti’s autonomous invoice-to-cash A/R management solution? Get a demo today!  

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