Every business eventually meets the customer who just… doesn't pay. Here's the escalation ladder — each rung cheap and calm, so you never jump straight from silence to lawyers.
Rung 1: The friendly reminder (day 1–7 overdue)
Assume oversight, not malice — most late payments are disorganisation. A short email with the invoice attached and a pay link clears a surprising number. Automate this; consistency beats charm.
Rung 2: The statement + phone call (day 7–30)
Send a customer statement showing everything outstanding, and phone. A call is harder to ignore than email, and you'll learn which kind of non-payer you have: cash-strapped (negotiate a payment plan, in writing) or won't-pay (keep escalating).
Rung 3: Stop supply and charge interest
Pause further work or deliveries until the account is current. If your terms provide for it, add interest on overdue amounts — the signal matters as much as the money. (Interest terms belong in your quote/contract before the sale.)
Rung 4: Letter of demand
A formal letter — from you or an attorney — stating the amount, the deadline (commonly 7–14 days) and that legal action follows. Attorneys' letters cost little and often produce payment by themselves; for many claims it's also the required first step.
Rung 5: Small Claims Court or attorney
- Small Claims Court handles claims up to R20,000, cheaply and without attorneys — but note: you generally can't use it against a company/CC, only individuals and sole proprietors.
- Above that, or against companies: attorney demand → summons, or debt-collection services. Weigh cost against the debt — sometimes settling for 70% now beats 100% never.
Rung 6: Write it off properly
When a debt is truly dead, write it off as bad debt. You get the deduction — and if you're VAT-registered on the invoice basis, you can claim back the output VAT you already paid SARS on that invoice. Don't let dead invoices sit "open" for years; they distort your books and your tax.
Prevention beats collection
Deposits, short terms, pay links on invoices, weekly statements and knowing your slow payers before extending them credit — the best collection strategy is not needing one.
360books automates the early rungs: overdue reminders, one-click customer statements, "View & pay" links, and a proper bad-debt write-off that handles the VAT side correctly — plus a Customer 360 view that shows who's worth chasing and who's worth firing.