Ajarn Mark Caldwell Blog

I received an email from a reader asking about a billing situation, and decided it was a good lesson to share.  In a nutshell, here is what the reader wrote:

We have a lot of clients who haven't been billed for a WHILE.  I'm talking at least 1/2 year if not more.  How do we, in a diplomatic way, say "Hey, sorry for not billing you, here's what you owe us to get you current."?  And how do we do that without making it sound like we're disorganized?

That is really an awkward situation.  You could easily come across as incompetent, especially if you approach this the wrong way.  The key here is not just in what you say, but more importantly what you do not say.  For starters, I would not say, “Sorry for not billing you.”  I do not advocate lying, but you do not need to make this statement in order to accomplish your ultimate goal, which is to get paid, not to confess your sins.

So I would prepare a statement like, “In a recent audit (or review) of our books for last year's business, it appears that we did not receive payment for the work performed on ____.” and give dates or other identifying project information.  This statement is completely true.  You have obviously done a review of your books or you would not know about this problem.  And it does appear that you have not received payment.  You do not need to say, “Hey, my bad, I didn't even send you a bill, but I still want to get paid.”  Avoid the subject of billing for the time being and let your customer bring it up if he wants to.

This should be done in a live conversation, either in person or over the phone.  When you are going to contact someone “out of the blue” about money they owe you, it is too easy for any written communication or voice messages to come across in an offensive manner.  So if it's at all possible, wait until you have the other party in a live conversation and then you can say it.  If you get their voice mail, say something like, “Hi this is ____ from ____ company.  Please give me a call at ____.”  Once you have made your statement about not receiving payment, wait for your customer's reply.  Do not give in to the urge to fill quiet space in the conversation.  You have made a statement and they know they need to respond, so let them.

There are only a couple of likely responses:

1. “Yes, we did pay you.”  If you get this response, ask them to please research the payment and provide you with a check number, date and amount, or perhaps even better a copy of the canceled check, and tell them you will do further research on your side.  It is possible that the error is on your side, not theirs, so give yourself a chance to save face by making the general statement and not an accusatory one.
2. “We never received a bill.”  This could also come across more accusatory as in, “Well you never billed us!”  Either way, you need not confess your sins of failing to bill them, but rather simply apologize that they did not receive a bill and offer to send them a current one that they can use to pay you.

I can't think of much other response you might get other than total and complete denial that they have ever heard of you or had you do any work for them.  Then you'll have to come up with a way to prove you did or write it off.  But unless you're dealing with unscrupulous clients, this is highly unlikely.  And if they are, then aren't you glad you found out now before doing any more work for them?

If there are any other true circumstances that might be relevant, such as you just fired your incompetent bookkeeper, you could throw that into the conversation if you wanted to, but it's not really necessary.  And certainly do not say something like that if it's not true.  Remember, your goal is to get paid, not to confess your sins or make excuses.

Good luck!