Keeping tabs on past due accounts is only half the battle. Numerous 3PLs and freight forwarders also struggle to consistently contact customers regarding their overdue invoices or other requests for payments. 

Even with the best intentions, competing priorities can redirect your billing specialists and controller from their AR obligations. 

Thankfully, a financial ops automation solution can handle payment status management and customer communications without adding to your team’s workload. Automated email notification sequences result in more on-time payments and a reduction in your overdue timeframes. 

By following these simple guidelines, your team can improve cash flow while reducing manual work.

Types of automated notifications — and when they should be sent. 

Automated payment notification emails are based on two elements: actions and conditions

The action is the driver. It’s why you’d want to send a payment notification to a customer. These fall under two straightforward options for accounts receivable: 

  • When a payment request is issued 
  • When an invoice is due

Of course, you likely already send customers emails notifying them of a payment request or invoice and its due date, albeit without a streamlined approach.

Automated email notification sequences result in more on-time payments and a reduction in your overdue timeframes.

Where automated notifications provide real value is in the condition: the timing or another similar factor, related to the action. Conditions may be a specific set of circumstances like:

  • Days after due date
  • Days before due date
  • Days after creation date

Actions and conditions enable your team to build an email sequence from invoice creation through multiple past due dates. 

Once payment is received, the sequence will stop automatically. And if a customer neglects all your reminders, the automation system can notify Collections to begin their recovery process. 

For example, your sequence for a Net-30 invoice might cover emails sent:

  • On invoice creation date 
  • 5 days before the due date
  • On invoice due date 
  • 10 days past the due date, with language included that a 5% fee applies to all invoice 30 days or more past due
  • 30 days past the due date, encouraging the customer to pay today to avoid the late fee
  • 45 days past the due date
  • 60 days past the due date
  • 75 days past the due date, notifying them a billing specialist will reach out if payment in full is not received within the next 10 days

Key steps for creating automated payment-due notification email sequences. 

Before building your sequences, your team should configure automated emails to each customer or customer type. The automation process works best with a little upfront planning in the right order:

  • Ensure you know the customer’s actual invoice approval process. Sending automated emails to the right email address—and at the right intervals—is crucial yet frequently overlooked. If your default payment term is Net-30 but the client abides by Net-60, one party will need to make an exception, or both will need to reach a compromise, to align expectations. What’s more, the number of invoices erroneously sent to unchecked inboxes is staggering. 
  • Send all payment requests through your financial ops automation solution. A reputable system will allow you to receive and make digital ACH, credit card, and wire payments. With payment requests and processing consolidated into one system, you’ll spare your staff from manually entering invoice and payment updates to the notification automation system to trigger an email sequence.  
  • Partner with Marketing, Sales, or Communications on the sequencing and content. While Finance should own the invoice and past-due email automations, don’t overlook the value your peers can bring to sequences. Marketing can provide vital guidance and feedback to ensure the language and communications cadence line up with your company’s branding and messaging. Sales may suggest that account execs are copied, or even be the “sent from” email address, for customers in arrears at a certain past due threshold, say 45 or more days past due.  
  • Start with several pilot customers for email sequences before implementing them across all carriers and vendors. Start small and ask for the pilot group’s feedback. Is the new payment system easy? Were the emails clear, friendly, and helpful? Make adjustments, and then roll out sequences broadly. Your team can (and should) continually tweak sequences as they learn more about their effectiveness. 

Reporting from email automation provides insights for refining your automation process. 

With an integrated payments and email notifications system, your team can run reports on variables tied to your KPIs. At the most practical level, they can set up a regular (such as weekly) report listing copies of all email notifications sent to ensure everything is in working order. Plus, becoming more aware of payment statuses will become the “new normal” without time-consuming data mining. 

In short order, your organization will have enough data for reporting on which accounts are frequently overdue — and, more importantly, how long they’re overdue. This provides Collections with a chronological digital paper trail as they strive to make headway with habitually late customers. 

You can analyze which automated reminders spur customers to pay, which types of customers seem to respond best to sequences, and how your overall time to payment has changed. All while alleviating your team from the monotonous work of late payment-hounding. 

Start automating your payment-due email sequence with Freightpay.

Contact us for a demo.