Payment terms: how to stop late payers

An event that's been delivered isn't the same as an invoice that's been paid. Without clear payment terms and a fixed rhythm of following up, some customers' payments quietly slip back by weeks. You usually only notice once your own bills are already on the mat.

In this article you'll read how to set a payment term, when to send a reminder and what to do if a customer genuinely doesn't pay.

Setting a clear payment term

Put a real due date on every invoice, with the day and the month. So not just a term like "within thirty days", because a customer who has to do the maths will do it in their own favour.

Choose a payment term that matches when you actually need the money in, and don't make exceptions per customer. The more consistent you are, the less there is to argue about afterwards over when payment should have arrived.

Mention that term in your quote and your terms and conditions too. Then it isn't the first time the customer sees it on the invoice, and they know what they're signing up for before the event is even booked.

Reminders and formal notices

Don't wait until an invoice is well past its due date before you say anything. Send a friendly reminder around the due date itself, and a clearer follow-up notice if nothing has come in two weeks later.

Set that rhythm once, and you won't have to work out each time when to follow up with someone. It also takes the awkwardness out of it: you're just following your own agreement, you're not chasing anyone down.

See also asking for a deposit as a caterer. It covers how to bring in part of the money before the event even happens, so a late payment hits you less hard.

What if a customer genuinely doesn't pay

If the reminder and the follow-up notice don't get you anywhere, an official formal notice is the next step. After that you're legally allowed to charge collection costs, provided it's also set out in your terms and conditions.

For smaller amounts, weigh up what a collection agency or legal action will actually net you. With a few hundred euros, you often end up spending more on the process than the invoice is worth.

If the same customer keeps doing it, change the agreement instead of the reminder. Work with a deposit from then on for that client, or ask for the full amount upfront. That's less hassle than chasing the payment every single time.

Protecting your cash flow

A few late payers put real pressure on your cash flow, especially in a month with a lot of your own purchasing and a full payroll. The money has been earned, but it's still sitting in someone else's account.

So keep track of which invoices are still open and for how long. Go through that list at one fixed moment each week, and you won't discover a problem only on the day your own supplier calls.

Invoicing and following up consistently works better over time than hoping the customer remembers on their own. Most people do pay, just rarely of their own accord first.

Frequently asked questions

What is a usual payment term in catering?

Many caterers use fourteen to thirty days after the invoice date. More important than the exact number of days is applying that term the same way for every customer and being clear about it upfront.

Can I charge collection costs?

Yes, after an official formal notice you're legally allowed to charge collection costs. Make sure it's also in your terms and conditions, or you'll get pushback over it.

How quickly should I send a reminder?

Send a friendly reminder around the due date itself, and a clearer follow-up notice after about two weeks if nothing has come in. Don't wait until the invoice is a month overdue, because by then it's long since ended up at the bottom of the customer's pile.

Can I demand payment upfront from customers who pay late more than once?

Yes, that's very common. For a customer who does it more than once, a deposit or full payment upfront works better than chasing the payment every time. Put it in the quote, and it won't come as a surprise.

What exactly should go on the invoice so there's no argument?

The date of the event, the number of guests it was calculated on, the agreed amounts and a due date in figures. Also refer to the quote the customer signed, so you don't have to dig through your inbox if a question about an amount comes up.

How do I keep track of which invoices are still open?

On one list you go through weekly, with the due date and the date of the last reminder per invoice. The moment that overview lives in your inbox instead of in one place, you always miss someone.

Catermonkey puts the payment term from your quote straight onto the invoice and shows which invoices are past their due date, so you can see at a glance who still owes you money.

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