How to collect payments after an invoice in Canada

Collecting payments after sending an invoice is a crucial step for Canadian small businesses to maintain cash flow and financial health. You must communicate clearly, follow up systematically, and keep accurate records.

Why this comes up / what goes wrong

Small-business owners often face delays or missed payments because invoices lack clear payment terms or because follow-up is inconsistent. Without a structured process, payments can be overlooked, leading to cash flow issues. Businesses running sales on email, text messages, or spreadsheets may lose track of which invoices are paid or outstanding. This makes it harder to prioritize collections and can frustrate customers if reminders are poorly timed or worded.

Step-by-step

1. Create a clear invoice: Ensure the invoice includes your business name, contact details, the customer’s information, a unique invoice number, invoice date, payment due date, itemized list of goods or services, total amount due, and accepted payment methods (e.g., e-transfer, credit card, cheque).

1. Send the invoice promptly: Deliver the invoice via the customer’s preferred channel (email, WhatsApp, or mail). Confirm receipt if possible.

1. Set payment terms: Specify the payment due date and any late fees or discounts for early payment. Common terms are Net 30 (payment due in 30 days).

1. Track invoice status: Keep a log or use a CRM to monitor if the invoice was sent, viewed, and paid. Update this regularly.

1. Send polite reminders: If the payment due date passes without payment, send a friendly reminder immediately, then follow up again after 7 and 14 days if unpaid.

1. Make direct contact if needed: Call or message the customer to discuss any issues delaying payment. Be professional and understanding.

1. Record payment when received: Mark the invoice as paid in your records, noting the payment date, amount, and method.

1. Reconcile payments: Match payments against invoices to ensure full settlement. Address any short payments or discrepancies promptly.

1. Maintain documentation: Keep copies of invoices, payment confirmations, and correspondence for your records.

1. Review and improve your process: Regularly assess your payment collection effectiveness and adjust terms or communication strategies as needed.

Example (fictional figures)

A Surrey, British Columbia HVAC company sends an invoice on 2024-06-01 for a repair job:

• Invoice amount: C$1,200
• Payment terms: Net 30 (due 2024-07-01)

Step 1: Invoice created with all details including payment methods (e-transfer and cheque).

Step 2: Invoice emailed on 2024-06-01.

Step 3: Payment due date set as 2024-07-01.

Step 4: Invoice status tracked in a spreadsheet.

Step 5: On 2024-07-02, no payment received, a polite reminder email sent.

Step 6: On 2024-07-10, still unpaid, a phone call made to customer.

Step 7: Customer confirms payment by e-transfer sent on 2024-07-12.

Step 8: Payment recorded on 2024-07-12 as C$1,200.

Step 9: Payment reconciled with invoice; full amount received.

Step 10: Company reviews process and decides to add SMS reminders for faster follow-up.

Common mistakes

• Not specifying payment terms clearly: Prevent by always including due date and accepted payment methods on the invoice.
• Delaying follow-up: Prevent by scheduling reminders immediately after the due date.
• Using informal or inconsistent communication: Prevent by maintaining professional, polite, and consistent messaging.
• Failing to track invoice status: Prevent by using a CRM or a tracking system to monitor sent, viewed, and paid invoices.
• Ignoring partial payments or disputes: Prevent by promptly addressing discrepancies and communicating with customers.
• Not keeping documentation: Prevent by saving all invoices and payment records systematically.

Doing this in HelloGrowthCRM

HelloGrowthCRM offers a built-in quoting and proposal tool to create, send, and track invoices directly from a deal record. You can see the status of your quotation or invoice (sent, viewed, accepted) alongside your follow-up tasks, helping you stay organized. Payments received are linked to invoices and deals, making reconciliation easier. Learn more about HelloGrowthCRM’s WhatsApp and SMS CRM and its built-in CRM dialer to improve your payment collection process.

Frequently asked questions

How soon should I send a payment reminder after the invoice due date? Send the first reminder immediately after the due date passes, then follow up again after 7 and 14 days if payment is still outstanding.

What payment methods should I accept? Accept payment methods convenient for your customers such as e-transfers, credit cards, or cheques. Clearly list these on your invoice.

Can I charge late fees on unpaid invoices? Yes, you can include late fees in your payment terms, but these should be clearly stated on the invoice to avoid disputes.

How do I handle a customer who disputes an invoice? Communicate professionally to understand the issue, provide supporting documentation, and negotiate a resolution promptly.

What if a customer pays only part of the invoice? Record the partial payment, notify the customer of the remaining balance, and follow up until the full amount is paid.

Key takeaways

• Always include clear payment terms and methods on your invoice.
• Track invoice status and follow up promptly after the due date.
• Use polite, consistent communication for reminders and calls.
• Record and reconcile payments accurately.
• Keep thorough documentation of invoices and payments.
• HelloGrowthCRM helps manage invoices, payments, and follow-up tasks from one screen.

Collecting payments after an invoice in Canada is easier with a clear process and the right tools. To get started, try HelloGrowthCRM’s Free Forever plan with 200 leads and no credit card required at free CRM for small business.